Have you noticed lately the proliferation of websites of online forex brokers? Have you also noticed the many forex ads which are flooding the internet almost daily! Most of them paint pictures of lucrative investment scenarios! But, are their claims really true?
As expected, the attractive websites and the extensive and frequent ads have drawn quite a large number of individual investors into putting part, if not all of their hard earned savings into this seemingly lucrative online investment scheme. Unfortunately, while most of these online brokers won't dare admit it, statistics show that only less than 25% of their clients end up making money on Forex. The total number of individual investors who practically lose their shirts on foreign currency investments is just a mere shave off the constantly increasing number of new sign ups. The number of losing investors almost approximates and is almost equal to the number of new clients opening forex trading accounts prompting many to ask the question - is making money on forex just a myth?
Currency Trading
If there are no records that will show individual investors making profits or building a fortune out of trading foreign currencies then we can safely conclude that indeed it is a myth. But, alas, there are a lot of investors who have gained prominence and built financial empires out of trading foreign currencies! Most prominent of them all is George Soros, a Hungarian-American businessman who manages his own Soros Fund Management. Soros is known as the "Man Who Broke the Bank of England" in 1992 after he had correctly speculated then that the Pound would be devalued by the British Government. He sold the Pound heavily against all the other major currencies and made billion out of it.
Another known and respected financial figure who made it big trading foreign currencies is Michael Steinhardt. At one time, he managed a Billion hedge fund with sizable placements and exposure in the currency markets. There are other successful foreign currency traders who chose to remain anonymous and keep their earnings as well as their trading secrets close to their chests and away from the prying eyes of other investors.
Making money on Forex is therefore, not a myth. It is in fact a reality that money can be made from trading currencies!
Becoming a foreign currency trader is actually easy. With a credit card, opening an online forex trading account is a breeze. Actual buying and selling currencies online requires a mere click of the mouse and familiarity with the trading platform being used. Getting in and out of the currency market anytime in real time is often never a problem at all. With the latest user friendly technology offered by most brokers to their clients, learning how to make actual currency trades online has become as simple as learning your ABC. But, this is also where the confusion and misconception starts.
Because it is easy to learn how to execute online trades; because the user-friendly technologies adopted by most brokers made forex trading simple enough for even the least computer literate, many of these first time investors developed the wrong notion that making money on forex is just as easy. Little did they realize that generating profits out of actual trades is a completely different story! Only when they start losing money do they realize that there is more to done. There is more to be learned. Sad to say, the realization often comes too late.
George Soros did not merely pluck out his trading decision out of nowhere when he speculated against the British Pound in 1992 and made Billion in profit. He studied the underlying fundamentals first before he made his bet! Based on his prior studies, he calculated that sooner or later the British Pound would have to be devalued. He definitely would not have traded based on wishful thinking alone. This is what differentiated him from the others. He took time to consider all the factors that has bearing on every trade he was about to make before making the decisive speculative move in the market. Knowledgeable investors have always had a higher chance of success than those who enter their trades no different from those placing bets on the gambling tables in the casinos.
One must always remember that forex trading is highly speculative and entails a great deal amount of risks. One must never forget that trading foreign currencies online is a risk taking activity. One should always be wary of the fact that forex is a highly volatile market where the risks involved can at times translate into a total loss of the initial investment.
There are, however, ways you can minimize the risks in forex trading. By having a carefully crafted trading plan (the assumptions of which are founded on existing economic fundamentals), and by taking only the well calculated trades based on such a plan, you will have a greater chance of making money on forex. This is the only way you can really make money trading foreign currencies.
How to Really Make Money Trading Forex (Or, What Your Forex Broker Won't Tell You!)
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