I Have Heard That Forex Trading Is Not Safe And Highly Speculative?
Posted by benny in Barebone PC on December 24th, 2009 | 7 responses
Is this true? Can anyone tell me more about this?
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7 Responses to “I Have Heard That Forex Trading Is Not Safe And Highly Speculative?”
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Playing Forex can appear alluring, but the majority of people who try it lose money. All you have to do is do a web search on the words “Forex” and “lose” to see this is the consensus.
Forex is what we call a “zero sum” game. You are making a bet with someone else about whether a currency will rise or fall. For every winner there has to be a loser. If you are smarter than the average player, you may make money. If you are dumber than the average player, you are likely to lose money. Most of the people making the “bets” in Forex are highly trained professionals at banks and other institutions. You are unlikely to beat them at this game.
Actually Forex is not quite a zero sum game. It’s a slightly negative sum game as the Forex broker takes a small percentage each time in the spread. It’s a small amount but over a hundred trades, it ends up being a considerable amount of money. So the average player is likely to lose money, and remember the average player is a highly trained professional and probably smarter than you.
There is a lot of luck in Forex, and if you play it, you will have some periods of time where you make money. This is usually because you are having a lucky streak, not because you have suddenly become an expert Forex player. However, most people are unwilling to admit their success is due to luck. They become convinced they have a system that works, and lose a lot of money trying to refine it.
I would recommend not trying to do Forex at all, unless you are a trained professional. It’s like playing poker with people better than you, with the house constantly taking a small percentage from the pot.
To be honest forex trading is probably safer than stock trading. The forex market is so liquid (all major banks in the world involved in it) that it is more predictable than any stock. Be aware of the times in the day that forex moves sharply and you should be fine. Make sure you also pick up some investment strategies before trading it.
No its not truth……
Forex is a smart game played only be smart people. There are tremendous scope to earn huge here. Even i am a forex trader and is earning a good amount. In forex trading many people think that the more complicated a method they use in forex trading the more likely they are to make money. The fact is that is not a truth the simple systems work best. As you know there are two main ways to analysis the currency rate: fundamental technical analysis. Simple systems are more robust easier to trade with discipline as you understand the logic can therefore follow it with confidence when it has a losing period.
See ya
When you are making a bet on something (exchange rate in this case), it is supposed to be speculative. However, if you make a clever well informed bet, chances are that you will win. and if you win, you win big so forex is really a matter of knowing the proper skills.
Not safe and speculative is an understatement. I’d stay away from it entirely. A while back, it was illegal to trade in the Forex in the US. I don’t know when (or if) anything has changed.
forex trading is highly speculative if you are in the futures market. you could win a bunch or you could lose your shirt. a safer alternative is to buy (not sell) options. but there too you could lose your shirt but you will lose it a little at a time.
Of course it’s not safe. You are not really investing in anything. You are making a bet on the movement of exchange rates.