Foreign exchange trading (or simply forex trading) is fairly easy to do these days but earning money and getting rich on forex trading are totally something else.
If you want to try your hand at forex trading, it has become rather easy because a lot of tools are available right at your fingertips. Forex trading can be done even while you are at home, using a computer or even a cellphone.
With the forex market operating 24/6, opening on Sunday afternoon (US time) and closing after stock traders complete their business on Friday afternoon (US time), you have a lot of time in your hands to do the trading.
Why is Forex Trading Difficult?
But while forex trading is fairly ‘easy’ to do, it actually isn’t! There are plenty of reasons why forex trading can be really difficult and that you might not earn a lot of money.
What makes forex trading more interesting for many is that they could easily make a lot of money if they made the right decisions. Of course, you have to also invest a lot of money in forex trading before you can actually make really huge profits. The downside here is that you don’t only have a higher chance of getting higher profits, the losses could also be quite huge!
The forex brokerage often offers huge leverage which magnifies gains; but this also magnifies losses.
But currency volatility could easily wipe out your investments in a single trade! For example, On January 15, 2015, the Swiss National Bank removed the Swiss franc’s cap of 1.20 against the Euro, something that had been in effect for over 3 years. The currency soared so high and reached a whopping 38% versus the US dollar and 41% versus the Euro.
The move was so sudden that it surprised everyone – and led to the loss of hundreds of millions of dollars, affecting a lot of forex traders. It wiped out the capital of many small retail investors and led to significant losses among the richer players, including giant banks.
Just like the stock market, the prices change quickly in forex trading. But it’s hard to predict what could happen next, and if your choice will lead to a higher profit.
Moreover, there has been a number of issues regarding fraud and market manipulation, leading to the loss of many investors’ profits.
But if you still want to try forex trading, it’s a good idea to keep tight stop-losses and to limit your leverage. Don’t go all in. Moreover, invest only the money you can afford to lose – definitely not your entire life’s savings or emergency funds! And it’s always a good idea to find a reputable forex brokerage like FxPro.
Why Hire a Forex Brokerage?
Though it is possible for you to acquire the skills needed to get rich in foreign exchange trading, remember that it is also easy to lose money here. By hiring a forex brokerage, you are letting the top traders do the work for you.
But with so many forex brokers offering their services to would-be traders, it’s understandable that finding the right one can be a daunting task. Moreover, you have to first evaluate yourself and your goals in forex trading before you can choose the perfect match. After all, there are people who are prepared to take huge risks with the higher possibility of huge gains or losses while there are also others who would rather stay on the safer side.
Make sure that the broker you choose will understand what type of trader you are and how far you are willing to go, in terms of your investments. However, you should always make sure that you are only dealing with legitimate forex traders or you’ll end up losing all your money even before you begin to make a trade!
Considering that there are so many hackers these days (and they are getting smarter!), make sure that your forex broker offers integrated security such as two-step authentication.
FxPro is one of the leaders in the forex industry since 2006. The brokerage offers Negative Balance Protection, no dealer intervention, and tight spreads, high liquidity, no slippage on Instant Execution and no re-quotes on Market Execution.
Moreover, the brokerage assures that all client funds are segregated from operating capital in Tier-1 accounts with major global banks. With free unlimited demo accounts available, lots of webinars and materials in the FxPro Educational section, and dedicated beginner support, you get to learn more about forex trading on the road to success.
Soon, you’ll find that foreign exchange trading can really be so easy these days…