No, forex is not a good side hustle. I cannot begin to say how annoyed I get when I read, watch, or listen to something when there words “forex” and “side-hustle” are used in the same sentence. Yes, forex may well be one of the most heavily traded markets in the world, but it is incredibly difficult to master. I’ll quickly run you through why forex is not a side hustle.
What is a forex side-hustle?
Forex as a side-hustle involves trading the foreign exchange markets part-time in the hope of generating some extra income. Of all the markets and asset classes that you can potentially trade, forex is the hardest. I’d say on a relative scale, stocks are the easiest, then indices, then commodities, then forex.
A side hustle is actually something that you are good at that you can do for other people. Say for example, if you are a graphic designer. You can moonlight (work in the evenings) as a freelancer for start-up businesses helping them create logos and charge a small fee on sites like Fivrr, peopleperhour.com or upwork.com. There you are using your existing skills to generate more income for yourself.
Forex as a side hustle would work if you were a professional forex trader at a hedge fund and trade the funds money during the day. Then when you got home from the office, you traded some more. However, professional forex traders can’t actually do this because there are very tight compliance restrictions on personal dealing. This helps reduce conflicts of intersts between traders, client and market manipulation.
Forex side-hustle scammers
I have written endlessly before about how scammers operate in the forex markets. One of the most common forex side-hustle scams is selling trading courses or signals. These usually work by people on social media claiming they make “loads of money” trading forex and posing with flash watches, sports cars or luxury shopping. They of course, then go on to say that if you want to be like them you can either copy their trades (signals) or learn to trade like them.
They make money by either charging you for a “learn to trade” course, or by referring you to a broker who pays them if you open an account.
The specifics here are that the course is worthless and probably copied from another course they have paid for. Also the broker they refer you to will not be regulated by the FCA (as financial proportions have to be approved by a brokers compliance department). So they will be referring you to an offshore broker where your funds are not safe, and you do not get the client protection from the FCA.
Can you make money trading forex as a side-hustle?
Despite what I have just said, yes you can make money trading forex as a side hustle. But you will need to fully understand how the economics of the underlying countries and economies of the currency pairs are trading. For instance, if you are trading GBPUSD, you will have to understand how interest rate changes in the UK, will move the price of the USD.
Many social media scammers, hyping forex side hustles aslo suggest, that by using simple technical analysis techniques you can predict where the forex markets will go. This is not true. Technical analysis is the study of historic price events and can be used to look for potential patterns in the market. It cannot predict, where a forex pair will go. At best, they are best guesses, based on what has happened in the past.
My final point would be to look at the risk warnings of forex brokers. THey have to state what percentage of their clients lose money. This is normally about 70%. So why is that? Well, forex trading is hard. It’s not impossible and some people do make money, if they practice, educate themselves, and take it seriously.
Trading forex is not something to be taken lightly or as a hobby. Unless you are an economist.