Forex - Do you have what it takes?

win-big-in-forex

Forex is a very profitable business. No kidding. No fuss. You could earn as much as $500 in a minute! Translate it in Philippine currency and that's about P22,500 (if $1=P45). Yes, it is possible through the power of leverage. But, the risk is also too high. If you could earn that much in a matter of few seconds, your money could also be gone as well in a snap of a second.

Unlike in stocks market investing, profits could be only be realized in months or years.

I was called out late in the afternoon from an unidentified caller. He didn't introduced himself first but instead informed me about my trial account that is about to expire if I won't activate it immediately in 3 days.

I was shocked as I caught myself after a meeting. "I'm Rommel, by the way Sir, from iForex", the caller rushed. "Couldn't I renew it next week?", I asked.

"No sir, if you can't deposit until Wednesday it will be closed forever" he said. "And oh, by the way, we have a promo only for today! If you will deposit $100 we will give you a bonus of $25!", he's tempting me. God, it's Monday and I don't have the money, I thought.

Then let it be closed. I decided but never said it anyway.

That short story is about Forex, anyway. In 2012 (2 years ago), I opened a trial account to practice trading in the currency market. I got a stint in currency trading when I was a Forex advisor to a private firm. Too bad I didn't last long in that company as I haven't been able to find an investor lol.

Do you have the balls?

In currency trading, the game is simple. But not easy. There are two ways to earn: buy or sell. Unlike in the stock market trading, you will only earn profit if you sell something that you bought. No selling of stocks, no profit.

In Forex, you could buy currencies and sell it at a higher price, you will earn. Or, you may sell a currency even if you haven't bought any, and earn from it when the market goes down.

Forex Trading Basics

1. You can trade like you have $500,000 even if you only have $100. That's the power of leverage. Leverage is the capacity to trade more with less. In gambling, you can't expect to bet your $10 and expect to win $10,000. It's not gonna happen. If you win, your $10 will only earn $10 maximum in every bet; typical ratio is 1:1. In Forex, it is 1:100 or more.

2. There are so many currencies to choose from. Either you want the US Dollar (USD) or the Japanese Yen (JPY), it's really up to you where you want. And it doesn't end there. Global currencies are traded including Euro, Swiss Francs, Canadian Dollar, etc. You will only choose where you are confident. E.g. If the US government reports that there is an increase of unemployment rate in New York, expect for a bearish market and sell the USD.

3. Fast transactions. There will always be buyers and sellers in the global currency market. So everytime you sell (as long as it is the current market price), it will be bought instantly in a snap of a finger.

4. Trade currencies 24 hours a day, 5 days a week. Stock market trading is only during 9AM - 3PM, Mon-Fri. Nuff said.

5. There are a lot of online Forex brokers. Choose the one that really cares for you who is not just after of your money. 

When the stakes are high, the fall is deep.

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