Who doesn’t want to make an extra buck while being off of a job because of maternity leave? It is a thrilling moment to really discover a profession that is not difficult to learn, and you can do it from anywhere on your smartphone. Today, we are going to discuss how financial trading might be a solution to earn money while awaiting a new member of a family.
Financial Trading As Your Additional Income Source
Financial trading refers to activities that involve buying and selling various financial assets on exchanges to make profits. Speculators who are trying to predict prices and make money are called financial traders, and they are not predicting markets; rather, they are quickly reacting to ongoing trends. Traders can speculate on many different markets, including Forex and stocks. FX vs stock trading is an age-old debate, and both of them have their distinctive advantages and disadvantages. Since trading requires careful planning and risk management skills, it is always a good idea to start small and learn along the way. This way, you can gain an extra income source and develop your skills slowly. When is a better time to learn financial trading than maternity leave? If you have some free time, you can still return to your job and have extra time to allocate to a new profession that can provide you with additional income.
Financial Trading vs Investing
Before we continue to explain Forex trading and stock trading, it is critical to understand what trading and investing are. Differentiating between these two popular methods of exposing financial assets might help many beginners to select the most suitable method for extra revenue. Financial trading involves buying and selling financial assets such as stocks and Forex during the trading day. It is a short-term endeavor where traders try to capitalize on intraday market movements and always close their positions at some point. Investing, on the other hand, is a long-term endeavor where an investor buys stocks or other assets and holds them for months or years.
The minimum capital for reasonable investing is not low, especially when you aim for dividend payments to build a passive income, and not everyone has enough capital to invest in various stocks. Financial trading requires a considerably lower amount of capital and can be a great way for investors to start low and develop their skills.
Forex Trading
Forex trading refers to currency trading on foreign exchange markets. It involves buying and selling various currency pairs to make profits on market movements.
Forex Trading Pros
- Accessibility — Forex markets are open 24/5 and allow traders to trade at any time that suits their schedule and time zone.
- Liquidity — Forex markets are the most liquid markets in the world, with a daily volume of over 6 trillion dollars. Liquidity means you can enter and exit trades almost instantly.
- High leverage — Forex brokers offer high leverages of 1:100 and beyond, allowing traders to manage high-volume trades with relatively small budgets. (A 100 USD account with 1:100 allows you to open a 10,000 USD position)
Forex Trading Cons
- Volatility — Forex markets can be highly volatile sometimes (especially during major economic news releases), which makes it possible to lose considerable amounts of money.
- Complexity — Trading FX, like other assets, is not easy and requires time and dedication to learn how it works and how to develop a viable trading strategy.
Stock Trading
Stock markets are among the oldest financial markets in the world, and they allow traders and investors to buy and sell stocks of companies. Stock markets allow traders to gain exposure to various company performances and can be very profitable in both the short and long term.
Stock Trading Pros
- Ownership — Buying stocks means owning a piece of the company, which can be incredibly profitable in the long term if the company performs well.
- Stability — Stock market trends can be more predictable depending on various factors, such as the company’s performance and the overall trend of the sector.
- Dividends — many companies pay dividends to their stockholders, and it can be incredibly attractive for investors to buy and hold stocks in the long run.
Stock Trading Cons
- Market hours — Stock markets are open during certain hours of the day, and depending on your time zone, they might not always align with your schedule.
- Capital requirement — Stock trading and investing both require a considerable amount of capital upfront compared to Forex trading. (you can trade on Forex even with 100-1000 USD, while for stocks, it is reasonable to have 10,000 USD and more).
- Research — To analyze the company’s performance, traders need to research its financial data and review the industries in which the company operates, which can be tiring and difficult.
The Bottom Line
Financial trading offers a novel way to create an additional revenue stream during maternity leave. Both Forex and stock trading can be incredibly profitable. However, stock trading requires more capital and research while not being open 24/5. Forex trading is available 24/5 and allows individuals with any schedule to access markets easily. Both Forex and stock trading come with distinctive pros and cons, and by understanding these factors, it is easier to select proper markets for trading.
Jennie Powell is the co-founder of Conversations With Bianca, a leading mom blog. Her creative writing style sparks reader-friendly and engaging content that’s adored by parents and bloggers. Jennie loves to empower and educate moms. This has helped Conversations With Bianca gain a loyal following.
Jennie’s unique voice is seen in her blog posts. She gives insight into the everyday lives of moms and offers helpful parenting info. Her commitment to providing relevant content distinguishes her from other bloggers in the parenting niche.