Published On: Sat, Jul 6th, 2019

The odds against you are what make money with trading forex

It is fair to say that at first glance forex trading seems to be a bit of scam. There are plenty of skeptics who say it will never make you rich as it is too uncertain, and you are not even playing with real money. Online forex trading especially makes people a little dubious about what is a 21st-century phenomenon. So, can Forex trading make you rich or is it all just hype with a handful of lucky traders making a quick win?

Odds are against you

If one was to be brutally honest and frank forex trading will not make you rich. The odds are not in your favour as a one-man trader mainly because you lack the funds to trade in the bulk amounts needed to make significant gains.  That being said, there are gains to be had and while investing in or even having an entire business dedicated to trading currencies may not make the millions of dollars often cited by online trading companies you will nonetheless make some profit. Some profit, yes, but only if you play it safe and when you are acutely aware of things that can go wrong.

photo/ Gerd Altmann

What is against you will help you win

To make money trading forex is relatively easy, it is about buying and selling at the right time. Some would say it is a gamble, but others say it is an art. As with any gamble or art form, it makes sense to be armed with the facts and knowing the factors that define the space you are playing in. Even if the factors are negative knowing as much as possible is vital for success to be attained.  In simple terms, there are five factors that count against you when trading currencies:

Risk Is often higher than the reward

Knowing the risk is higher than the reward with almost every transaction is one of the reasons that profit is made. However, using this to your advantage is where successful traders learn to win. The secret is to make small profits on higher volumes of trade rather than looking for the quick big win.

Platform and Technology Failure

Much of the forex trade today is computer controlled. There trading many platforms out there, some making audacious claims, but these platforms can crash or falter. Knowing that your trading is in the hands of technology that can fail is important and it helps to find some redundancy.

Limited access to the best information

Big banks and governments have access to information that the average trader does not. Many traders would love to have access to more sensitive information; however, they remain a step behind all the way. Following moves of the big players is where the clever traders play.

No Guarantees

Forex Trading is not regulated and there are very few guarantees in place that can ensure what you make is what you will get. Clearinghouses can impact actual exchange rates, and this simply needs to be taken note of.

With these facts in mind, forex trading may not make super rich but with knowledge of what is against you-you might avoid going bust.

Author: Matthew Perry

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  1. […] night. This gives you a better chance to earn more money through successful trades. Moreover, day trading helps to get faster feedback about marketing conditions. The more you trade during the day, the easier it […]

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