January 12, 2011
Is forex trading a safe way to earn lots of money?
By Planet Wealth
Hi guys,
Recently i’ve seen so many sites that speak about forex trading and brokers and so on. I saves a bit money and i was thinking to start trading forex and double it. Please i need some advice. Preferably someone who has past experience with it. Is it a excellent or terrible thought. Please advice
Topics: trading tips | 12 Comments »
12 Responses to “Is forex trading a safe way to earn lots of money?”
Comments
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January 12th, 2011 at 10:21 am
Forex trading is being "sold" to the general public as if everyone in the "know" is doing it. Do stock day trading first….. since it’s much simpler! Stock day trading is incredibly hard. Forex is 10 times worse.
January 12th, 2011 at 10:21 am
Terrible thought.
This is how you make money trading (anything). 1. Knowledge/skill 2. Inside information (illegal) and 3. Luck
You probably need at least two of those to be successul. How many have you got?
January 12th, 2011 at 10:21 am
FOREX is a tool. And just like any tool, it’s safe – if you know what you are doing. Because you can use significant leverage, you have tremendous potential to make – or lose – money.
So, the question is how do you learn about it? I would suggest checking out Baby Pips (see below for the link.) Take some of the free training that they offer. It’s quite excellent. (It was recommended to me by a FOREX professional.) Also, find a free "paper trading" account and practice with fake money first.
January 12th, 2011 at 10:21 am
Um… it’s excellent to see that you are interested in foreign exchange trading, but it isn’t entirely the most conservative way to make money – if anything it is a rather volatile one that certainly requires a lot past experience. It requires a lot of examining charts and identifying trends as to whether a currency might strengthen or weaken, then betting on it by allocating your money into that currency. If place simply, there is no better word to describe it other than "speculation". Even a forex trader with over a decade of experience is going to lose money. It is certainly only for thew aggressive investors who have an appetite for risk, not to mention those who have the time and effort to watch the market as it happens.
If you are a beginner, which you seem to describe yourself as, then perhaps a better place to start would be trading on the stock or bond markets. They are a more safe place to invest in, but there is still the chance of loss
If you plot on doubling your money, then you will have show patience, skill and discipline. Warren Buffett, a man who many call the world’s greatest investor had average gains of roughly 25% per year. Even he couldn’t produce 100% returns quickly. But through patience, skill and discipline, he’s built a fortune of approximately US$50 Billion, give or take a few billion.
Best of luck, and never be discouraged by loss. Every trader, investor, etc. wouldn’t be human without it.
January 12th, 2011 at 10:21 am
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 similar to 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. The net winnings of everyone combined equals zero. 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.
Really 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. But, 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.
Further complicating the problem is the large number of Forex scams on the internet. Most Forex websites are of questionable honesty. You will find many people on the Internet that claim they made a lot of money using Forex. They are usually liars trying to make money. They will say: "Go to Forexcrap,com/q2347." The "q2347" is a signal to the Forexcrap site that you are being referred to them by "q2347." If they sell something to you, "q2347" gets a kickback. These coded signals can be hidden by different methods in the link. Other people will refer you to their own private website or blog for the purpose of trying to get money off you. Also there are a excellent number of trolls out there that like to pretend they are successful forex traders just for the fun of 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.
Read the warnings in the links below:
January 12th, 2011 at 10:21 am
Hi Simon,
If you really interested in Forex trading business, then I must tell you that Forex Trading just isn’t for everyone. You might get burn in this business if you don’t posses special skills or don’t have proper education, knowledge and enough capital to start with.
It is can be a excellent thought if and only if you spare your time to get education first. You can get free, quality education on trading the currencies from BabyPips.com, they have very complete training for newcomers and it is Free! you don’t have to spend a dime to get all the basic training about Forex.
If you end the basic education, then you might want to try to trade the markets using Demo account first. Don’t rush thing to deposit your hard earned money to any broker yet. Remember that you have to try demo trading first. Work on this demo trading for at least 6 months minimal. Why that long? it is because the Forex market is a very dynamic market where price is always changing due to many factors such as the political issue of one particular country that currency’s participate in Forex arena, disaster that happen in that particular country, economic factor of that country, market sentiment etc.
Demo trading first to see whether or not the trading techniques that you are posses really works or not, is it really profitable or not, on what market condition does it works best? take notes from each trade you are initiated to see whether or not you already follow your own trading rules.
It is essential for you to have all of this. You don’t want to just jump into the live markets and trade using your live trading account because it is can be very perilous for someone with limited budget like you and me. We don’t want to lose our hard earned money in matter of weeks or months right?
Forex trading can be very terrible thought if you just come without any proper education first.
January 12th, 2011 at 10:21 am
no, it is very risky…very!
January 12th, 2011 at 10:21 am
This simple answer to your question is a definitive "No", and here’s why…
The basic rule of investing is High Risk = High Reward, Low Risk = Low Reward
With that said, your question is really a contradiction…there is no "safe" way to earn "lots of money". Applying the rule of investing above, there is either a "risky way to earn lots of money" (reckon gambling) or a "safe way to earn a small amount of money" (reckon Treasury Bills).
Why is forex risky? For one, there’s a learning curve that most beginners fail to take the time to go through. They jump in head-first into forex trading without knowing too much about the markets, how currencies behave, and how to control their own emotions (i.e., dread and greed) when they trade.
Secondly, forex trading usually comes with high leverage. This is a double-edged sword…high leverage means you can magnify your profits…as well as your losses.
Going back to the rule of investing…you can add the following:
High Leverage = High Risk = High Return
Low Leverage = Low Risk = Low Return
So there you have it…the reality is there is no safe way to earn lots of money.
January 12th, 2011 at 10:21 am
Forex trading, just like any type of investment, involves some degree of risk. AIS has some excellent sections on their website about the risk involved in forex trading and about the forex market in general.
January 12th, 2011 at 10:21 am
Yes its a excellent thought but be sure that you learn how to trade, meaning how the trends moves and the most vital thing is don’t be greedy.
January 12th, 2011 at 10:21 am
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