Forex trading has become a very popular way for individuals who work a full time job in any profession to have another career going on in their spare time. And why not? If you’re at your day job for 8 or 9 hours a day, that still gives you ample time to pursue an outside business that can prove to be extremely lucrative. In forex, the idea is pretty straight-forward. You simply do your best to buy any foreign currency pair at the lowest price possible and then turn around and sell it. This chance to earn considerable profits in a limited amount of time draws many people to the market. Of course, not every participant earns on every deal, but at the end of the day, if you do your homework, watch the charts and limit your losses to what you can afford to lose in a day, you have a good chance of staying in for the long run.
When to Get a License
This is where the confusion sets in, because it is not always necessary to obtain a license to begin trading forex. The deciding factor depends on whose money you are trading with. If you are using only your own money, then there is a good chance that you don’t need a license at all. If you’re not investing or trading money belonging to other people or organizations, there’s no need for you to be licensed. However, it also depends on where you live and where you will be working. For instance, if you are living in the US but you want to do business in a foreign country, you will need to investigate the rules of that country. Each country can have regulations regarding licensing that vary, so familiarize yourself with those requirements and you should be good to go. There are many offshore areas that do not require a trader to be licensed in order to work. However, make sure that you are allowed to trade the currency that you plan to work with as well, as some countries only allow trades in their own currency. If you want to invest money belonging to other people or agencies, you probably will need to be licensed in most countries. You can turn your brokerage services into a small business, get a license and have a greater degree of flexibility.
Working with a Brokerage Firm
To begin trading without a license, you can simply work with a broker. One safe way to start is with a mini account. Don’t worry about starting with a large deposit; work with what you have. So long as the account you set up has no limits, you can switch your account as you become profitable. Take advantage of the time you spend working with a broker to learn the ropes. A good broker is like a safety net that gives you a chance to experiment with minimal risk. If you decide to get a license down the road, your broker can advise you.