Introduction: When saying Forex, it includes all leveraged instruments, such as: Futures, Commodities, ETF’s, CFD’s and so on.
Forex as a general definition has been attributed with many negative, loose and biased outcomes defined as loss of capital, scam, bucket shop, gambling and many more. I stand here to defend the term and the various simple or complex assets that seat beneath it.
One may recruit a tool in order to protect his exposure from sudden changes in the market, may he be an importer/exporter offering 90 days credit, protecting himself from currency exchange, maybe an airline operator locking the fuel prices for the next season, maybe a well educated investor that can build up a hedging strategy while almost completely eliminating the risk and gaining a solid profit and many more positive examples of how someone may engage in the Forex trading.
As the global markets and its fluctuations are constantly providing differences, up and downs and the exposure is at the fingertips of anyone with a credit card and an internet connection, there are many forms of trading and more than that many types of traders. You may choose to enjoy the thrill and stimulate yourself with advanced platforms, analysis theories and methods as long as you are aware of the leveraged product fast movements.
There are brokers that their modus operandi is the reason some traders engage in trading highly leveraged products from the wrong reasons and without proper knowledge, ending up funding the broker’s activity and his team, leaving the trading career within a few months, with a twisted perception of the Forex market. A common form of this sample is a call center sales person who offers 25% daily return for a small investment and with a fast pace and talent persuades a client to hurry and jump on a once-in-a-lifetime chance to join a trend. In many cases the client invests money he cannot lose with the hope to earn a buck, like everyone does.
The money making mechanism is much more complex and even if I’ll reveal all the schemes and technologies that are put in practice it will not help John Doe to choose what, how and with who.
The Forex market is a zero-sum-game (unless engaging activity with the wrong broker), meaning that on every losing trader there’s a winning trader. Actually it is a negative-sum-game due to the subtraction of the commissions. The most important thing is how to choose the right broker for what you are looking for.
Some brokers alongside uneducated naive dreamers have the common contribution to the defaming of the Forex industry. I’ll break down on that a little. I had the opportunity to meet some veterans in the Forex market that have been and still trading, making a decent income from full time trading. Listening to their life story and insights have convinced me that it is possible but same as any profession, one needs perseverance and perhaps the talent. Think about a company posting a hiring ad for a certain position. The skills needed are: proven experience as an Architect, Mathematics Teacher, Corporate Finance, Team Leader, Cloud Based Archive Operations and Fashion Advisor. Where would you find anyone with such vast and combined skills? The same here, one needs to evolve within the trading reality, day by day, over a long period of time, experiencing all extreme outcomes, constantly archiving and reviewing the actions, taking risks, learning from every trade what to do and also what not to do on the next one. You need to know about capital management, psychology, macro and micro economics, technical analysis, trading terminology to the perfection, constantly evolving with the market, spotting trends, combining assets and strategies, eventually being able to observe and decide in a very short time period while taking in mind all the factors.
A full time trading career needs at least a couple of years of training as an active trader. It is a career and it needs all the resources available in order to get there and you need to engage in it same as you build a relation with the opposite sex. You will be courting, striking, hitting ups and lows, overcome crises, accept and stick to it. Think about an old couple holding hands and what they’ve been through together without turning against each other.
The Forex market is not evil. The Forex market doesn’t play tricks on you. The Forex market is a platform, a platform that is mirroring you. At a certain moment you may be excited, calculated, depressed, berserker, self assure, etc.
Test your skills with an initial affordable amount and try to evolve slowly. Do not attempt to "break the bank" on any trade, ever. Do not get tempted to win back a loss and do not open positions you will not be able to hold (margin needed). If you wish to get some hype and fun, try binary. They're simple, involve a limited pre-defined risk and fast. Tip: the demo accounts should be used to get to know the platform and not to test your trading abilities. Demo account should be avoided since it generates false results that will not be taking place when real money will be involved. It is a psychological discrepancy.