By James Woolley
You will probably already know that there are a few different ways you can trade the forex markets. You can apply for a trading job in the City, whereby a bank will employ you to trade the markets on their behalf, or you can use your own money to trade from home or from work. Whichever you choose, you have to bear in mind that they are totally different.
To begin with, it is not easy to get a job with a top financial institution. You can by all means apply to every one of the banks in the City, but you will have no success at all unless you have a good degree from a good university behind you. There have been times when people have got in without a degree, but this is often because someone in their family has very good contacts.
If you like the idea of being a self employed forex trader, then it is a lot easier to get started. You can easily open an account with a forex broker and deposit some of your savings. Then you can trade whenever you want, providing you have an internet connection. With regards to the amount you need, it doesn’t have to be a six figure sum, but you do need to make sufficient profits to live on.
This is a notable difference because when you are employed as a trader, you are not actually trading your own money. There is still the pressure from above to make money of course, and you will receive some big cheques if you manage to do this, but at the back of your mind you always know that you have a big salary to fall back on.
When you are self-employed, you will not make any money at all unless you make a profit. Furthermore your standard of living is entirely dependent on how successful you are at trading the currency markets.
As a result of this, there are different pressures associated with each position, and they involve different mindsets to some degree. Those who work from home will have a different mindset to those working in the City because there are different incentives involved. One group of people are interested in earning big bonuses, whilst the other has to make money in order to earn a decent standard of living.
City traders have the luxury of being able to take a few more chances due to the fact that it is not their money on the line. People who work from home, however, do not have this luxury and have to preserve their capital at all costs before they can even think about making any money.
In some ways it is a lot easier to work in the City for a large bank. Even if the worst happens and you lose a lot of money from poor trading decisions, you will still have earned a huge salary before losing your job. It may not even get to that stage anyway because when working in the City you have a lot of trading tools at your disposal, which home-based traders simply cannot afford.
So overall you have to say that the two jobs are completely different, and you need to adopt a completely different mindset for each one. This is because there are different pressures involved. Even though your job is on the line when working for a bank, your entire livelihood is on the line when you work for yourself. So this is something that you should always bear in mind.
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