Trading and Traveling
If you have dreams of traveling on a long-term basis, even just for a few months, they needn’t be out of reach. Sure, you might need some savings to get started, but you can also earn money as you go. That doesn’t mean you have to pull pints in a bar every night or wait tables either.
Whether you’re seeking relaxation on sun-kissed beaches or the adrenaline rush of skydiving, trading could be the answer to your travel dreams. Online trading provides several good modes for beginners, including spread betting and contracts for difference (CFDs). You could consider it as a way to make some spending money, as long as you exercise caution.
H2: How does trading work?
It’s very easy to get started with online trading. You just need a laptop or smartphone and a decent WiFi connection. There are many trading platforms available, and setting up an account is straightforward. You have the choice between using a website or downloading an app. So, you could be in your hotel room, brunching at a local café, or sitting poolside with a beer and still be “working.”
Popular financial assets for trading include currency pairs, commodities, shares and indices. Within these groups, individual products are offered by different brokers. Oil and gold are popular commodities, for example.
H3: How to spread bet or trade CFDs
Spread betting is available only for those living in the UK, since it is exempt from capital gains tax and stamp duty. CFD trading is available in most countries worldwide.
With both modes, you can trade on margin. This means that you open a position by depositing a small amount of money into your account. A broker provides the rest of the cash. Both pros and cons are attached to trading on margin. Technically, you are using money that doesn’t belong to you. Increased profits can be the result, but losses are also possible so tread with caution.
Trades take place based on whether you think the value of a financial instrument, such as a share, currency pair or commodity will rise or fall. So you go long (buy) if you think the value will go up and go short (sell) if it’s looking likely to drop. Unlike with investing, you never actually own the product in question.
As with most forms of trading or investing, there is risk attached to CFDs and spread betting. You can lose money if your trade goes against you, which could defeat the object of earning a bit of extra cash on your trip.
The good news is, most trading platforms offer risk management strategies. Stop-loss orders provide one popular example. Taking advantage of a stop loss means that your trade will close at a given price. Setting this up with each trade is a sensible way to protect your profits. It also gives you peace of mind to enjoy your time away, rather than worrying about watching your trades like a hawk.
Another way to avoid risk is with practice on a demo account. Before you even open your account, you should be experimenting with virtual money. You need to know if trading is a realistic way for you to top up your funds. Also consider whether you enjoy it – it’s not for everyone.
Trading should never be considered as a sole income, particularly for those testing the water. However, it offers potential for travelers seeking some quick wins.