Is Online Trading A Feasible Option to Make Extra Income?

Globally, we’re currently in one of the most unstable economic situations in decades. Inflation combined with soaring energy prices and the approaching cold and Christmas season has created uncertain and scary times for many households across the UK and the rest of the world.

Due to this, more people than ever are looking for ways to earn extra income, with mixed results. While extra work, gig jobs, and selling one's belongings are considered safe and efficient ways to earn extra money, some people are taking a riskier path and are trying their luck at online trading.

Because of this, we’ve taken a closer look at the online trading industry in the UK and we have evaluated it as an alternative income. The results have been shared in the following article.

What is Online Trading?

Let us start off by outlining what online trading is. As the name entails, it is a form of financial trading that is conducted online, using online brokers. Today, the two most common ways to trade online are forex trading and CFD trading.

Forex trading is the act of trading currency pairs and making use of the biggest financial market in the world. CFD trading, on the other hand, is a form of derivatives trading that you can apply to any financial instrument there is. CFD is short for Contract for Difference and can be used to trade stocks, options, cryptocurrencies, and much more.

When trading CFDs, you never own the underlying asset. Instead, you speculate on the asset’s price development.

Both of these types of trading are considered high-risk and require both a lot of practice but mostly a lot of market knowledge to be conducted properly.

Is Online Trading a Safe Way to Earn Extra Money?

As mentioned, online trading is high-risk meaning you always run the risk of losing the money you trade with. In fact, as many as 80% of all retail traders end up losing money in the long run.

With that being said, those that master all the necessary skills can make a lot of profit from online trading. For example, there are day traders who only trade forex and make incredible amounts through a few hours of trading each day.

However, as a beginner, the risk of trading is too high to be considered a feasible way to make extra income., if you’re struggling financially, trading should not be considered for any reason. You see, the golden rule of online trading is to never invest more than you can afford to lose, and if you’re already struggling you probably don’t have enough funds to start trading safely.

Even if you use the best UK automated trading platforms that do a lot of work for you, the risk is still considered too high.

Hence, online trading SHOULD NOT be considered a way to make extra income, especially not in these unstable times.

Investing Is a Better Option

If you’re interested in making a profit from financial markets, trading is – as mentioned – not recommended. This is because of the high risk, the fast pace, and all the knowledge that it requires.

However, investments could definitely be an option to consider for you since it’s not as risky and a bit easier to master. The only downside is that investments yield long-term profits with a several-year plan. Therefore, investments are not a great option to make extra income fast.

What’s the Verdict?

To summarise our point, online trading is not to be considered an option to make any form of extra income if you’re already struggling. If you have a stable economy, it can be a great pastime that might give you some profits, but there are never any guarantees.

In other words, trading is a luxury service that you should only consider if and when you can afford the potential losses.

In addition, long-term investments are not as risky and are a better option, although you won't make any fast profits.

Based on all of this, you’re much better off getting an extra job or cutting down on expenses in case you are worried about the looming inflation.