The foreign exchange market is a global decentralized or over-the-counter market for the trading of currencies. The idea is being revived among amateurs after Bitcoin and NFTs started to nosedive in 2022. But can trading currencies, often considered as dubious investments, benefit the planet?
How is forex (FX) trading connected to the push for a greener world? There are plenty of obvious and not so apparent connections between the two seemingly disparate topics. However, it’s important to realize that the recent COVID lockdowns led to millions of new at-home trading enthusiasts, primarily in forex and blockchain markets. Why is that such a big deal? Because even part-time traders tend to use fewer resources like gasoline, electricity, and natural gas.
But the big plus for green devotees is not just about a jump in the number of people working from home. It’s also about the kind of financial activity they’re engaged in. Remember that FX is not crypto mining, which was, just a few years ago, the hottest at-home employment activity for the financially minded. There are numerous reasons to be optimistic about the recent surge in forex trading. In all, there are at least four major reasons that ecology aficionados should not only follow but also take part in the international currency markets.
The Greenback is Rising
The dollar has had a very good year, rising against most of the world’s major currencies and holding its own amid inflation, massive shortages, wars, supply chain problems, and a potential recession at home. The benchmark financial index that tracks the dollar’s strength, DXY, tells the story of a choppy performance over the past five years but with a recent resurgence in 2022. Why do the green minded care about the fate of the greenback? Because a stronger dollar and an impending recession, while not so beloved by economists, are very good news for the health of the planet.
For several years, people from all walks of life have been warning of a potential economic reset or correction. The stock markets were the first signal just weeks ago. Then the Federal Reserve Bank raised rates three times in a row at successive meetings, which appeared to strike a blow against inflation and dampen growth. Perhaps these changes, a bearish stock market, and slow growth are a sign that environmentally friendly events are finally taking hold. Recessions aren’t all bad. Often, they represent a needed slowdown and typically bring much lower levels of energy consumption via weak demand for petroleum. An added bonus for green devotees: all-time highs at the pump also lead to decreased fuel use and cleaner air.
Demo Accounts Show Anyone How to Trade
Learning how to trade FX is not rocket science, fortunately. In a global economy where everyone seems to be looking for a side job, anyone can join up with a reputable online broker, use a metatrader 5 demo account to learn all the basics, and begin making forex trades with international currency. If you are looking at ditching the long commute and are looking for a job where you can slowly transition from your current career, FX trading can be the ideal, low-carbon footprint choice. No more huge gasoline bills, traffic jams, or office politics. Many people find that a week or two on a demo simulator is all it takes to test the waters as an international currency trader.
FX is Not Proof of Work Crypto
A few years ago, one of the fastest growing home-based financial careers was related to the cryptocurrency industry. It was called mining, and bitcoin (BTC) was the kind of the miners’ community. The problem with what is called proof of work mining, or the creation of bitcoin, is that it uses vast amounts of electricity, up to 1,000 times as much as a standard personal computer. Luckily, the newer proof of stake method does not gobble as much electricity but is still a long way from being as environmentally responsible as buying and selling foreign exchange currencies. If you’re considering working for yourself as a financial trader, FX is a far wiser and greener choice than being a bitcoin miner.
Currency Markets are 100 Percent Digital
FX markets and all related trading activity are fully digitized. What’s more, no tangible assets ever trade hands, as is the case with commodities and some futures exchanges. Thus, forex represents one of the very few careers that use electricity alone, and even then, in very small amounts. Some of the newer low-consumption computers on the retail market use about one-fifth the energy that standard PCs used a decade ago. Financial trading as a job is an energy miser. Few other professions, part-time or full, create less of a carbon footprint. One of the more subtle advantages of the digitized financial sector, particularly FX, is that it can accommodate an almost limitless number of participants. There aren’t many job niches that can make that claim while simultaneously being among the lowest consumers of energy.
