While the amount traded each day through the forex market declined from $5.5 trillion to $5.1 trillion in September of last year, this is still a huge amount that underlines the popularity of currency trading.
Far from just being a lucrative practice, however, currency trading also provides a steep learning curve about the financial markets as a whole. This means that it can provide a solid foundation for any form of financial career, regardless of the precise niche or job role you are looking to target?
In this article, we will discuss the benefits of trading forex and how this practice can enable you to lay the foundations for a successful career in finance?
- The Forex Market is Driven by Macroeconomics
If you are unfamiliar with macroeconomics, this is the field that studies how the aggregate economy behaves. More specifically, it explores the relationship between individual economic factors such as inflation, interest rates and gross domestic product (GDP), and understanding this field can give you a strong insight into how economies evolve.
Macroeconomics also impact on the forex market directly, so currency traders can gain practical experience and build a more general knowledge base that can be applied across a number of financial roles.
Financial advisers are required to have a keen understanding of macroeconomic rules, particularly when they are recommending investment options for their clients. So, forex traders can easily apply their knowledge to fulfil such a role and perform various advisory tasks.
2. Forex Trading Breeds a Deterministic Outlook
As anyone who has traded forex for a while can testify, determinism is an attribute that can help to inform successful investment decisions. This is a state of mind that recognises the underlying laws that govern change in the financial marketplace, each of which can dictate specific trends and price movements regardless of the wider, economic climate.
Many of these rules apply to multiple markets and economic vehicles, and in this respect forex trading provides a solid grounding for alternative financial roles. It can certainly breed the type of determinism that informs logical financial decisions, while also minimising the role that emotion plays in your thinking.
3. Understand the Role that Currency Values Play in the Economy
You may decide that a career in business consultancy is for you, and this places a heavy focus on delivering financial and investment advice to entrepreneurs. Understanding the value and the movement of currency may be central to this, as this has a critical bearing on various aspects of business management.
If a businesses primary currency is weakened, for example, the cost of imports will increase while exports become more competitively priced. The reverse is true when currency values soar, and these events will have a direct impact on core business elements such as pricing, sales and production.
Businesses in international markets may also need to tailor their pricing in order to remain competitive, so forex traders are well-placed to provide strategic business advice that has merit in the prevailing macro economic climate.