Many of us consider trading as not only a way to make more money but as an accessible form of investing. Meanwhile, investing is a great way to feel more secure as retirement approaches. However, some of us have no funds to spare for even the smallest investments. Is the world of trading barred for such people?
Not necessarily. We live in a day and age when there actually are ways to start trading with no money. Here we will explore cost-free trading options for those, who are looking for alternative modes of income.
First things first. There is more than one way to understand cost-free trading. The more traditional understanding equates cost-free trading with commission-free trading. In other words, it refers to brokers not taking commission from the trading deals you make and allowing you to keep all the earnings.
However, these days people are looking for more radical approaches to cost-free trading. Thus, the phrase is sometimes taken to mean trading with no money of your own invested at all. Is this possible and how? Yes, it is and there are a few methods.
Interestingly, trading with no money was always possible. There are at least two popular methods:
- Paper trading. This practice refers to using mock currency to trade stocks, bonds, or anything else. It is used to practice and build your trading skills or prove them to someone. With the advancement of digital trading, training your trading skills this way is even more accessible.
- Having a trading job. You can work for a trading agency and use someone else’s funds to make deals and earn a salary or get a commission. Another version of this method of trading with no money is being staked by a rich patron.
Unfortunately, there is a catch in both cases. Paper trading will not make you any money. One could say you are not trading at all, just playing, and would not be completely wrong. Meanwhile, getting a trading job is very hard and usually requires already having a proven track record of successful trading. And so does finding someone to stake you.
On a positive note, combining these two mays might be an option. Paper trading can be used to get the necessary skills for a trading job. Additionally, it can help you prove your ability to potential employers and funders without needing to have and risk any money of your own.
Yet, these are not necessarily the methods people think of when looking to start trading with no money today. What are the other options?
Constantly improving digital capabilities have given more access to many things, including trading opportunities. The main ways to trade with no money are associated with these digital opportunities in one particular market – the Forex market.
The foreign exchange market, or Forex, or simply FX, is the decentralized marketplace for trading currencies. Thus, you would go to the Forex market to buy euros with dollars, or British pounds with Swiss francs. If you make a correct assessment of which currency is going to go up in its relative value, you make a profit as now you can buy back more than you originally spent.
The Forex provides a few lucrative opportunities to trade with no money of your own. First, of course, you need to create an account. Here you have a few choices depending on what account you want to open.
- You can open a demo account. Many Forex brokers will offer an opportunity to have an account with no real money invested. These accounts are used for paper trading, that is to check and improve your skills. But you can make money by winning demo account contests. This way you do not invest money but if you make the best paper deals, you profit from the prize money.
- You can open a real account. Usually, to open an account with a Forex broker you immediately need to deposit money into it. To attract clients, however, many brokers offer no-deposit accounts and give you a starting sum themselves. The sum is often tiny, just $5 or $10 but it will get you into the trading game without having to use your own money.
These are the two main ways provided by the Forex market to start trading with no money. They are not perfect, have strings attached, and probably will not get you rich. But they are both fine for those who want to improve their trading abilities without using the money of their own.
The alternative methods to start trading with no money are not, strictly speaking, trading. Well, at least not at first.
One is to enroll in the Forex affiliate program. The gist of this method is that instead of trading yourself you invite others to open an account with a broker. The broker then pays you a commission from the deals those you invited make. This way you can first start making money from trading and only then use your winnings to actually trade yourself.
The other method is establishing a stream of passive income and then using that to start trading. Perhaps the most convenient way is by leasing your unused bandwidth to others. This is when you use an app that directs other people’s traffic through your IP so that they can use a fraction of your Internet.
This is the closest you can come to starting trading with no money while not working for any extra money. After all, if you are already paying for the Internet and not using all of it, simply setting up a method to get some of that money back is not much work. There are some apps online that will offer this service and will let you choose how much bandwidth you wish to share.
Thus, not having spare money at the moment does not mean you cannot start trading almost immediately. Look into these ways to pick the one that suits you best.