Why now getting more and more people trade forex?
Question:
I really dont understand. is it easy to learn? easy to make money? or others factors?
Answer:
I suppose the biggest draw to Forex is the potential of generating very favorable returns. The other side of that coin is that there is also the possibly of generating very unfavorable losses.
The Forex market is the largest financial market in the world with over $2 trillion per day in transactions. This provide great liquidity making it easy and quick to enter and exit positions. The other attractive feature with Forex is the fact that you have the opportunity to leverage your investment whereby $1000 can control as much as $400,000 of your selected currencies. Certain startegies will also pay you a daily interest..not on your $1000 but on the $400,000 that you control!
The last point that I would like to make is that you have an immense amount of free information available to you on the internet on the fine art of Forex trading. Most brokers will also provide you the ability to trade demo accounts where you put none of your own money at risk. It is imperative that you spend your energies on studying, learning and practicing (for free) before even thinking about investing your own hard earned money.
There are plenty of people that make a very good living trading in the Forex market. Perhaps someday you will too.
Best wishes for a prosperous 2007!
Paul
They are getting suckered in by hype that tells them that if they use their automatic software, they will be rich and it's so easy.
Many of them are multi-level marketing schemes where the way to make money is recruit others below you. The only trouble is, you need to be in early. Those that come late to the party won't see much.
Some platforms use red and green lights and when they're all green, you buy. Others try to make money on the carry (taking advantage of interest rate differentials in different countries). Those systems will work some of the time and you'll make some money. The only trouble is that Forex moves fast when an economic report is released by a country's reserve bank, you can lose lots, very fast, if you're on the wrong side of the move. Certain types of hedging can help but not always.
As an example, if you go to the Investor Village Forex message board, http://www.investorvillage.com/smbd.asp?... you can read some message by people trying out Freedom Rocks. One message titled "What a bloodbath today" says, "$10k account now worth $1760 this morning.."
The statistics are that 90% of first timers to Forex lose their money. To be sucessful, you need to do a lot of studying of economic activity in other countries, develop your own strategy and practice first, then practice some more to validate your techniques.
After 2 years, I trade Forex well enough to make more money than I lose but I'm not getting rich off of it. I do better in stocks.
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