Forex trader. The mere phrase calls up images of the Matt Damons and Leonardo DiCaprios of this world strutting their stuff on the big screen, depicting investment bankers and rogue traders who win or lose millions at the shout of a buy or sell. At least, that is what Hollywood tells us. Is the world of forex trading really that way, or is there room for regular people to make a few pounds on the side?
The question is an interesting one. Search the topic online and you will quickly find a choice of apps, and a wide list of brokers on sites like trustedforexbroker.com who can get you up and trading in no time at all from the comfort of your own home – money to be made, and no shouting or crowded trading floors required!
Then again, ask Google in slightly different terms, and you will be told that the world of forex is a dangerous place for beginners and that nine out of ten newbies lose their money and do not stay the course. So what are the facts?
1) The forex market is huge
Every day, approximately $3 trillion is traded in the currency markets. That is a serious amount of money, roughly equivalent to four times the sum total of every other equity or future traded worldwide. But we are not pointing this out just to stand back and admire the size of it. In the context of any sort of trading, size matters. A large market with lots of people in it has better liquidity and is therefore hugely unlikely to suffer any sort of catastrophic crash.
2) The forex market is complex
Why do you suppose nine out of ten newcomers fail dismally at forex trading? The answer is obvious – it is not because the market has suddenly ceased to be profitable after all these years, it is the simple case that most of these guys have only the most rudimentary idea of what they are doing. If you approach forex trading as a magical money machine that you can start utilising with little or no planning, you will definitely join the nine out of ten and live to regret it.
3) Anyone can do it
Thanks to the wealth of apps and trading platforms available online, forex trading is accessible to anyone. With the right strategy, you can make good money in as relatively short time, and even better, you do not need thousand in an investment fund to get going.
4) Anyone can get it wrong
Without wishing to get too mystical, your biggest enemy in forex trading is often yourself. The above points all make it sound very positive, and that’s because it is. But never lose sight of that 90 percent figure. People who are otherwise smart go into forex trading and come out losers, due to a lack of clarity and strategic thinking. Take it slow and steady, exercise sound risk management principles and you can come out on top.