I’ve read a lot about Forex, but I’ve never seen a proven profitable forex strategy, despite the claims of some scam web sites.
Playing Forex can appear alluring, but the majority of people who try it lose money. All you have to do is do a web search on the words “Forex” and “lose” to see this is the consensus.
Forex is what we call a “zero sum” game. You are making a bet with someone else about whether a currency will rise or fall. For every winner there has to be a loser. If you are smarter than the average player, you may make money. If you are dumber than the average player, you are likely to lose money. Most of the people making the “bets” in Forex are highly trained professionals at banks and other institutions. You are unlikely to beat them at this game.
Actually Forex is not quite a zero sum game. It’s a slightly negative sum game as the Forex broker takes a small percentage each time in the spread. It’s a small amount but over a hundred trades, it ends up being a considerable amount of money. So the average player is likely to lose money, and remember the average player is a highly trained professional and probably smarter than you.
There is a lot of luck in Forex, and if you play it, you will have some periods of time where you make money. This is usually because you are having a lucky streak, not because you have suddenly become an expert Forex player. However, most people are unwilling to admit their success is due to luck. They become convinced they have a system that works, and lose a lot of money trying to refine it.
Further complicating the problem is the large number of Forex scams on the internet. Most Forex websites are of questionable honesty. You will find many people on the Internet that claim they made a lot of money using Forex. They are usually liars trying to make money. They will say: “Go to Forexcrap,com/q2347.” The “q2347″ is a signal to the Forexcrap site that you are being referred to them by “q2347.” If they sell something to you, “q2347″ gets a kickback. These coded signals can be hidden by different methods in the link. Other people will refer you to their own private website or blog for the purpose of trying to get money off you. Also there are a good number of trolls out there that like to pretend they are successful forex traders just for the fun of it.
I would recommend not trying to do Forex at all, unless you are a trained professional. It’s like playing poker with people better than you, with the house constantly taking a small percentage from the pot.
Comment by Joe — March 24, 2010 @ 1:11 am
Forex isn’t investing, it is gambling.
When you buy a share of Microsoft, you think that because they are a well-run company with a good business model they will increase profits and drive up the share price…and in the mean time they will pay you a cash dividend for each share you own.
When you buy a foreign currency you are gambling that its value relative to some other currency is going to shift, and that is governed by political as well as economic factors, there is NO way to tell, it is no different than betting on a horse!
Comment by ThinKabootit — March 24, 2010 @ 1:38 am
yeah sure its profitable and fun but never ever put alot of money into it. Its like gambling really but with an edge. When you put money into it think to yourself im going to lose this money. Look for short term trends for example i just made a killing shorting eur/usd because it broke out of its trading range. Before you enter a position look at the chart i use metatrader. Look at band trading its very useful right now. Dont use 400:1 leverage youll get stopped out everytime instead use 100:1 leverage this means your going to have to put 100 into each trade but atleast you wont get stopped out every minute.READ UP
ps. the entire market is a zero sum game!
by looking at other peoples performance and counting other peoples money you can never get rich! worry about yourself. read the new market wizards randy mckay turned 2000 into 70000 in 9 months trading forex! Open a practice account with Etoro they are a good broker and practice see what works and what dosent.
Comment by ???????? — March 24, 2010 @ 2:10 am