Is forex day trading legit? And if so how profitable is it?
Question:
Answer:
The currency trading (FOREX) market is the biggest and the fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars, which is 100 times greater than the NASDAQ daily turnover.Markets are places to trade goods. The same goes with FOREX. The Forex goods (or merchandise) are the currencies of various countries. You buy Euro, paying with USdollars, or you sell Japanese Yens for Canadian dollars. That's all.
How does one profit in Forex?
Very simple and obvious: buy cheap and sell for more! The profit is generated from the fluctuations (changes) in the currency exchange market.
The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100! (in general, Easy-Forex™ offers trading ratios from 1:50 to 1:200). If, for example, the exchange rate of "your" pair of currencies increased by 0.6% in the last 4 hours, your profit will be 60% on your investment! Such can happen in one business day, or in a few hours, even minutes.
This paragraph of the article just shows how profitable it is. VERY profitable. But this ain't the way to 'get rich overnight.' It requires A LOT of hard work in figuring out your own strategies and how to deal with possible losses. Forex trading is legit. But a warning that there are a lot of forex scammers out there. Check out the links below, especially the articles in the forex resources section. Its very helpful.
Yes, it is legit. Its very close to a zero-sum game. Housing generally goes up.the stock market generally goes up -- meaning if you are "long" you have a good chance to make money (on average). But, that is not the case with FX.
As such, the question you have to ask yourself is whether you will be right more than the people you are playing against. The answer to this is not likely, given that you are competing against some of the smartest and most market-savvy investors in the world.
People get drawn in to FX trading b/c of the leverage -- you have the potential to double your money in a couple of weeks. But, leverage works the same way in reverse.
My guess is that it is very similar to gambling for the average individual investor. You are probably going to lose 55%-60% of your bets. Depending on the leverage that you use and your "luck," you could be at the craps table a while or just a short amount of time. But, the vast majority of people leave with less money than when they started.
I would strongly suggest looking elsewhere for investing, where there is less leverage and a more-equal playing field. If you just want to gamble, why not go to Vegas where at least you have the entertainment value!
Yes, and potentially, very very much so.
As noted by Rick, leverage lets you potentially increase your profits by large amounts. It's just as easy to lose tons because of the leverage as well. Especially if you have to use margin for your positions. Margin lets you actually lose MORE than you INVESTED.
ForEx is a highly specialized industry. Big companies have very well paid, very highly trained people running very expensive and very well developed (proprietary) software to help them.
Only use "risk capital" - money you could literally throw away and not miss it.
1) Yes.
2) Very profitable.
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