A Personal Watershed - Is Forex For You?
One of the biggest markets for investors to open up in recent years is forex trading. A lot of people use it as an alternative to the stock market, and after the bloodletting on Wall Street last fall, who can blame them? Doing forex trading requires a lot of soul searching, and a lot of time to do well. Asking if it's right for you means knowing the following things.
In a nutshell, forex trading is about taking a pair of currencies and their exchange rate; and playing off how that exchange rate varies on a day by day (or month to month) basis. You're not betting on the performance of a company, you're betting on the fiscal reputations of countries. There's less research involved, and you have the advantage that it's very difficult for currency values to plummet as rapidly as stocks can and do (and have, recently).
That said, the opportunities in forex don't allow quite as much growth potential as a stock program can, and forex trading is more vulnerable to inflation and currency devaluation moves by governments. Unlike a stockholder, you don't get a vote (or proxy vote) in the operations of the nation whose currency you buy. Forex trading is a 24 hour a day opportunity to make trades, with a span running from the London open to the Hong Kong close, meaning it spans more than five working days if you let it.
While there is a potential to make a lot of money in forex trading, that potential is only seemingly boundless. You're still going to be constrained by the usual trading range in basis point pips between a currency pair, and if you spot a trend, it's odds on that others have as well; like any kind of volatility based trading, you're always running on five minute old information. You can make (or lose) thousands of dollars in a handful of minutes.
A lot of traders try to automate the grind it out aspects of forex trading; these are automated trades that are programmed with ranges of acceptable values and buy and sell orders queued up if a condition is met. This is no experience for doing accurate research on your own, but can let you have the freedom of mind to, say, get out of your chair and use the bathroom without panicking that a market shift will wipe you out. There are some who take the (decidedly unwise) view of not even learning much about forex markets and letting the computer software do this for them.
Forex is a good way to pull in a decent income working from home. It's not the road to automatic easy riches, it's an investment. Like other investments you have to pay attention to it to avoid disasters, and the risk of disasters in forex is as large as the potential gains, especially with leveraged brokerage accounts. Still, it's a good way to make a lot of money working from home with nobody breathing on your neck.
Day trading on forex trades your time for watching numbers on a screen and plotting graphs. It pays handsomely if you're patient and follow the basics. And yes, it's possible to make more than doctors and lawyers who went to college for eight years. It's also possible to have an overleveraged put call wipe out two months of earnings in 15 seconds. We recommend focusing on conservative, safe strategies until you get a solid understanding of what's going on.
If you're the sort of person who lives for being wired on coffee, staying inside for a-- hour trading day, and staring at a computer screen, forex trading may be for you - even if only temporarily. The real secret of forex day traders is that the successful ones get out of it and retire, and retire early. - 23217
In a nutshell, forex trading is about taking a pair of currencies and their exchange rate; and playing off how that exchange rate varies on a day by day (or month to month) basis. You're not betting on the performance of a company, you're betting on the fiscal reputations of countries. There's less research involved, and you have the advantage that it's very difficult for currency values to plummet as rapidly as stocks can and do (and have, recently).
That said, the opportunities in forex don't allow quite as much growth potential as a stock program can, and forex trading is more vulnerable to inflation and currency devaluation moves by governments. Unlike a stockholder, you don't get a vote (or proxy vote) in the operations of the nation whose currency you buy. Forex trading is a 24 hour a day opportunity to make trades, with a span running from the London open to the Hong Kong close, meaning it spans more than five working days if you let it.
While there is a potential to make a lot of money in forex trading, that potential is only seemingly boundless. You're still going to be constrained by the usual trading range in basis point pips between a currency pair, and if you spot a trend, it's odds on that others have as well; like any kind of volatility based trading, you're always running on five minute old information. You can make (or lose) thousands of dollars in a handful of minutes.
A lot of traders try to automate the grind it out aspects of forex trading; these are automated trades that are programmed with ranges of acceptable values and buy and sell orders queued up if a condition is met. This is no experience for doing accurate research on your own, but can let you have the freedom of mind to, say, get out of your chair and use the bathroom without panicking that a market shift will wipe you out. There are some who take the (decidedly unwise) view of not even learning much about forex markets and letting the computer software do this for them.
Forex is a good way to pull in a decent income working from home. It's not the road to automatic easy riches, it's an investment. Like other investments you have to pay attention to it to avoid disasters, and the risk of disasters in forex is as large as the potential gains, especially with leveraged brokerage accounts. Still, it's a good way to make a lot of money working from home with nobody breathing on your neck.
Day trading on forex trades your time for watching numbers on a screen and plotting graphs. It pays handsomely if you're patient and follow the basics. And yes, it's possible to make more than doctors and lawyers who went to college for eight years. It's also possible to have an overleveraged put call wipe out two months of earnings in 15 seconds. We recommend focusing on conservative, safe strategies until you get a solid understanding of what's going on.
If you're the sort of person who lives for being wired on coffee, staying inside for a-- hour trading day, and staring at a computer screen, forex trading may be for you - even if only temporarily. The real secret of forex day traders is that the successful ones get out of it and retire, and retire early. - 23217
About the Author:
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posted by X - Men @ 8:51 AM
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