In case you didn't know, there is an economic crisis taking hold of households across the length and breadth of the UK.
More specifically, the level of disposable income in the UK has slumped to its lowest level in six years, following a pronounced decline of 1.1% during the the second financial quarter. This was the fourth consecutive quarterly drop, as inflation and the cost of living continued to soar while wage growth and interest rates remained low.
Despite this, it is not impossible for households to build wealth in the current climate. The problem is that such a goal can no longer be achieved through traditional methods, so it is important to take a proactive approach that focuses on optimising earnings rather than simply saving.
In this respect, financial market trading represents an accessible and effective method of building wealth in 2017. So, here are some tips to help you get started and beat the economic malaise!
1. Choose your market wisely
The financial marketplace has experienced huge diversification in recent times, as new asset classes, derivatives and trading vehicles have continued to disrupt the sector. This, in turn, has created numerous opportunities for traders, who now have the option to build a diverse and profitable portfolio that offers considerable returns.
One market that should feature heavily in your plans is the foreign exchange, through which you are able to trade currency pairs as derivatives. Despite being a volatile market, this offers huge liquidity to traders and also relieves investors from the burden of owning the underlying asset.
This means that traders can effectively profit in a depreciating market, as they are able to use vehicles such as spread betting to hedge against the performance of specific pairings. Over time, this can prove invaluable as you look to build incremental returns and boost your earnings.
2. Use third-party resources to build knowledge
Knowledge equates to power in the financial marketplace, especially when dealing with highly liquid and volatile derivatives.
It is therefore crucial that you source as much data and insight from third-party resources as possible, while also accessing the real-time newsrooms featured on modern trading platforms. Established blogs such as Sharp Trader also include in-depth technical analysis of live events in the forex market, making it possible for traders to make informed and ultimately profitable decisions.
These resources not only help you gain much-needed technical knowledge, but they also ensure that you can utilise this in a practical and real-time market setting.
3. Hone your skills with a demo trading account
Arguably the most important element of your trading education is to bridge the often sizeable gap between theoretical knowledge and practical application. Fortunately, this objective is easier to achieve than ever before in the current climate, thanks largely to the sustained evolution of online trading platforms.
Essentially, these platforms currently feature demo trading accounts, which provide you with full access to simulated and real-time markets. These replicate corporeal price shifts, trends and market movements, with the only difference being that you can hone your predetermined strategy without being required to spend your hard-earned cash.
When used over a period of between three to six months, this type of resource can help you to gain practical knowledge and a real understanding of the market. It is this that turns potentially good traders into great and successful ones, so it is crucial that this resource is exploited before you enter the market for real.