Is Forex Trading More Risky Than Index Trading or Stock Trading ?…. Any form of trading is risky if you do not know what you are doing but risk management, training and money management (and some experience) can help minimise some of the risks.
Most brokers will advise clients to only trade with funds they can afford to part with.
Many have been burned with Forex because you have taken the plunge blindly into a market that did not know, attracted by promises of high earnings that brokers and promised management company.
In many they have put a lot of money. And the words Forex Trading or Forex and online scam (scam in English) have been approached very often since then.
I know very closely this environment, and I also know several traders who live Forex and manage money for others. Forex offers an opportunity to gain incredible, but only to those who approach this world with the right approach and realistic expectations.
E ‘in the nature of seeking the shortcut. And that’s why slogans like “Earn 200% in two days“, “Buy for 50 € the software that makes trading automatically for you even when you sleep” or even “Forex Management Company, guaranteed 150% gains per year “… I am still present everywhere in the internet.
The thing that bothers me about these proclamations is that you never mention the risk.
Trading in all financial instruments, not only in the currency market, it always starts by measuring and managing risk in the first place and only then you think about the possible gain. This is a fundamental point that will deepen in the near future about the relationship between risk and control investment.
The big opportunities offered by the Forex is the fact of being a very liquid market and little manipulated, making it ideal for trading. The ability to use the lever makes it even more attractive because you can control the amount of capital that would not otherwise be able to control.
Leverage is one of the least understood concepts in the financial world, and I will speak in greater detail below. For now I just say that while for most people the lever is a danger for me is an opportunity that, properly handled, it becomes one of your great ally.
As I said the secret of success in trading is risk management even before the gain.
So in this light you can better understand my opinion on the financial leverage: the leverage of the danger is that it can magnify your profits but also losses. However, if you establish the a priori risk you can never have bad surprises from the lever. It ‘a matter of knowing the tools you use.
Many people talk of the lever without really knowing what it is. The lever, not only in trading, it is not a hazard in itself, nor an obligation, but an opportunity. The investor is to learn to use it wisely. Otherwise it is better not to use it at all.
In conclusion, the Forex is not at all a scam but a great opportunity if you have the knowledge to understand if what you are proposing is realistic or a flop.