Forex Trading: Ways to Supplement Your Retirement Income "Credit News 24"
“You can be young without money, but you can’t be old without it.” - Tennessee Williams
Many people dream of the day that they can retire and relax, spending time doing what they currently do not have the freedom to do. However; the challenge is to ensure that they have saved enough to retire on. The combination of living longer, as well as reduced savings, are forcing people to work longer or retire on less than they originally anticipated.
Peter Vanham in his article titled "Global Pension Timebomb: Funding Gap Set to Dwarf World GDP" notes that "the world’s six largest pension systems will have a joint shortfall of $224 trillion by 2050, imperiling the incomes of future generations and setting the industrialized world up for the biggest pension crisis in history."
Many solutions to this problem are being touted such as increasing the retirement age as well as providing people with 70% of their pre-retirement income. However, this goes against the Organization for Economic Co-operation and Development's (OECD) guidelines for providing people with a similar standard of living during retirement as before retirement.
Therefore, the question that begs is what do you do to supplement your retirement income?
Supplementing your income through currency market trading
By way of backing up the validity of considering Forex trading as a viable retirement side hustle, let’s look at the psychological advantages of being a financially stable investor. As a financial advisor from Weiss Finance notes: “The easiest psychological situation for traders is when there is little or no pressure to make a profit immediately or regularly.
This situation allows them to make decisions when they are not stressed; ergo, they do not rush trading decisions and take the time to research and investigate potential trades thoroughly.”
THE BASICS OF FOREX TRADING
The Forex market
Investing in the global foreign exchange market is slightly different to conventional stock market trading in that the world’s currency market is not housed in one brick and mortar building. It is a decentralized market, where financial centers in London, Paris, New York, Hong Kong, as well as Zurich are all electronically linked together.
All aspects of currency trading such as buying, exchanging, and selling currencies at current or predetermined prices are conducted through this network of global financial centers.
Currencies are also always traded in pairs. The world’s four major currency pairs being the US Dollar and the British Pound (USD/GBP), US Dollar and the Euro (USD/EUR), US Dollar and the Swiss Franc (USD/CHF), and finally the US Dollar and the Japanese Yen (USD/JPY).
Currencies are quoted in amounts up to four decimal places, and the value of both currencies in a currency pair is quoted in relation to each other. For example, the USD/GBP exchange rate is quoted as 1 USD = 0.7767 GBP.
Currency pairs
Currencies are also always traded in pairs. The world’s four major currency pairs being the US Dollar and the British Pound (USD/GBP), US Dollar and the Euro (USD/EUR), US Dollar and the Swiss Franc (USD/CHF), and finally the US Dollar and the Japanese Yen (USD/JPY).
Currencies are quoted in amounts up to four decimal places, and the value of both currencies in a currency pair is quoted in relation to each other. For example, the USD/GBP exchange rate is quoted as 1 USD = 0.7767 GBP.
These figures mean that 1 USD will cost you 0.7767 GBP to buy. Conversely, if you have GBP to exchange for USD, you will receive $1.30 for every £1 that you have.
This is just a basic introduction to investing in foreign currencies. Apart from learning the technical aspects of monitoring currency pair movements, overall market movements, as well as learning to understand the impact that the global geopolitical events, as well as the corresponding socioeconomic conditions, can have on the world’s currencies, it is important to trade carefully and practice risk-aversion strategies.
In conclusion
This is just a basic introduction to investing in foreign currencies. Apart from learning the technical aspects of monitoring currency pair movements, overall market movements, as well as learning to understand the impact that the global geopolitical events, as well as the corresponding socioeconomic conditions, can have on the world’s currencies, it is important to trade carefully and practice risk-aversion strategies.
The older you get, the less you should risk losing your retirement savings. The caveat here is that all financial market trading has an element of risk attached to it. Without risk, there will never be any gains.
Therefore, you cannot and should not avoid risk; however, you must mitigate your risk of losing large sums of money by trading cautiously, only risking small amounts on each trade, and by choosing an appropriate trading strategy based on the current global conditions.
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Title : Forex Trading: Ways to Supplement Your Retirement Income "Credit News 24"
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