Silver surfers take to Forex trading for extra retirement income
Investing in the money markets might sound to many people like the last thing on earth that someone would choose to do in retirement. The pressure of the trading floor and the need to take risks and make snap decisions surely make Forex trading a young person’s game. After all, aren’t traders all burned out by the time they are 30
That picture might be a popular one, but it has more to do with Hollywood blockbusters like The Wolf of Wall Street and Margin Call than it does with real life. Police officers say that the big screen over-glamorises their profession, but Forex traders can’t be far behind them.
Amateur trading is on the up
The image of the high-pressure, high-risk trading world might even have been reasonably accurate 30 years ago. However, in the online age, anyone and everyone can get into trading using desktop or even smartphone apps. Of course, the fact that you can do something doesn’t automatically imply that you should do it. But there are compelling reasons why this is a tempting way for retirees to boost their pension pots.
Approach with caution
Fools rush in where angels fear to tread. So said Alexander Pope in 1709, and while he probably wasn’t talking about enthusiastic amateurs and their trading apps, his words ring true today.
There are lots of horror stories about Forex-trading amateurs losing money, and each of them has one thing in common. They all rushed in without working out their strategies, managing their risk or, in short, having the slightest clue what they were doing. The apps might make the mechanics of trading simple, but conceptually, it is still highly complex.
Learn the basics, and take advice from the experts
It’s nice to think that by the time we reach retirement, we’re a little too worldly wise to foolishly rush in, so that is one thing in favour of Forex for silver surfers. The other is that retirees typically have more time to spare than younger generations. There is a wealth of online training courses to take, not to mention authoritative Forex blogs to follow and to become a successful trader, the amateur investor needs to soak these up like a sponge.
Older generations are typically wiser to the fact that there is no easy way to make quick money without effort. Sure, Forex trading can be highly lucrative, but you have to put in the hours to reap the rewards.
Set your path and stick to it
Having no clear strategy is one reason why amateurs lose money on Forex. The other reason is that they have a strategy, then abandon it. Typically, this means doing something outside their previously defined risk appetite to either break a losing run or extend a winning one.
The wisdom of years is another great tool under these circumstances. After all, if a strategy seems right when you are thinking objectively, suddenly changing it when you are caught up in the excitement or panic of something unexpected happening makes no sense at all.
Forget the Wolves of Wall Street – sometimes it is simply a case of the old dogs being best at learning new tricks.
Keep up with the top stories from Reader’s Digest by subscribing to our weekly newsletter.