About Forex: Is Forex Trading a Safe Way to Make Money?
n a world where even the safest of safe havens for investment no longer inspires confidence, new traders want to know: is Forex trading a safe way to make or invest money? This article will explore why Forex is generally considered a "less safe" market and why that is not necessarily true.
Visit any website which sells any product related to Forex trading and somewhere on the first page you should see a "fine print" warning from the NFA and/or the CFTC (the two government regulatory agencies that oversee Forex trading in the US). While the required warning itself is long and somewhat complicated, it can easily be summarized in this sentence: If you trade Forex, you are probably going to lose all your money.
Frankly, it's hard to disagree with either the formal warning or the summary. Since retail Forex was first made available to the general public, the statistics have remained the same: between 90 and 95% of all new Forex traders will lose all the money in their first trading account.
But this begs the question: is Forex trading so dangerous that these kinds of losses are inevitable, or does this speak to the lack of quality information and training available to the trader?
The latter certainly seems as reasonable as the former.
The problem faced by most new Forex traders is that they were lured into the market by promises of instant riches, either by following a questionable trading method or by allowing some kind of "trading robot" to trade their account for them.
In either event, the entire idea of Forex trading was sold to them as a no-work, get-rich-quick scheme. And this could not be further from the truth.
Forex markets are volatile, but not any more so than plenty of other markets at one time or another. One merely needs to glance at the price of gold or copper to see that there are plenty of non-Forex markets where price can make sudden drastic moves with little or no warning.
But the vast majority of the time, the Forex market (meaning the individual Forex trading pairs) moves in a very predictable manner, often moving in one direction for a prolonged period of time. A trader merely needs to identify that direction, place a trade, and stand by patiently until a price goal is reached or some other reason causes the trader to close the trade.
Unfortunately, too many people who fell for the "get-rich-quick" pitch lost all the money in their account and walked away from Forex, vowing never to return and telling their sad tale of woe to any and all who would listen.
People who were smart enough to reject the products and the promises made by the scammers and instead took the time to educate themselves on how to best approach the Forex markets found they could consistently make money from their trading efforts.
Like most things in life, the vast majority is still looking for the easy way to make money and they will continue to be disappointed, whether they keep looking for that "Holy Grail" forex trading method or they turn their attention to some other market or venue.
If you have the desire to be a successful Forex trader, it is well within your reach. All it will take is time spent learning how to spot winning trades, and the intestinal fortitude to actually fund an account with real money and start placing trades.
