ARE THERE ANY ADVANTAGES TO THE FOREX MARKET/ WHICH MARKET IS BEST FOR TRADERS?
Most investors are very familiar with the stock market, bond market, and CD's. Some are aware of the future’s market perhaps because it deals with the commodities we see and use every day, such as: Gold, corn, soybeans, oil, gasoline, wheat, silver, and many more. To the contrary, few are aware of the enormous Forex Global Currency Market. This market is larger than our United States stock and futures markets combined. It represents the trading and exchange of currencies of all the countries in the world.
All of these markets are actively traded by investors around the world. They use fundamentals, technical analysis of charts and graphs, and other methods to try to capture profits. In 1988, Forex Currency trading was really opened up to the average investor when the major banks and players elected to allow small traders and speculators to participate. It has been the fastest growing investment medium in the world since then.
WHICH INVESTMENT MEDIUM IS THE WISEST?
Prior to the recent real estate collapse, the word was that the real estate market was the safest investment medium. As a result of the recent real estate collapse in which thousands have lost their homes or gone bankrupt, it should be clear to everyone that real estate investing is not all it was promoted to be. The promotion was always that real estate has made many more millionaires that any other investment? That may be true, but it also represents a lot of debt and risk, and it has caused more people to file bankruptcy than any other medium.
In that regard, real estate is far more dangerous and risky than investing in stocks, futures, or Forex Trading. The stock market has been good over the years to many investors, but it gave everyone a serious wake up call in the collapse of March of 2000. Many have not yet seen their account balance return to its previous highs, and it has been over twelve years. And the "professionals" fail to inform new would be investors that 2000 was not the first serious collapse of the markets. There have been many before and there will be many in the future.
Trading is not investing. Trading is active management and involvement with your money. In my opinion, trading is far safer than investing, because with computers and charting, we can make money in up or down markets, good times or bad, recessions or boom times. A trader can react to news and adjust their positions quickly. Investors in 401k’s and IRA’s seldom even read their quarterly statements. To me, that is a formula for failure!
So I am not about to try to tell anyone what is the best investment medium for their money. Everyone is not cut out to be a trader. A “trader” can be many different things. A trader can be longer term, medium term, short term, or a day trader. That decision is a personal choice.
I do know for a fact that one can make hundreds and thousands of dollars in an hour in Forex with its great leverage. Unfortunately, the United States government, in its infinite wisdom, has forced the reduction of that leverage “to protect us.” All that really accomplishes is it makes trading more expensive. People can just buy more lots and pay more commissions. I also know in a week I can often make more money percentage wise in stocks than most do in a year. And the person who does not invest is a doomed loser, with inflation eating at his nest egg every day.
There is much said today, mainly because the government has forced the message to be told, that there is risk in trading everything. That is true. There is risk in trusting your government too, or the IRS, or your broker or banker. There is risk in crossing the street even with a cross walk and a light blinking "Walk." We risk our lives when we get in our car (a much bigger risk than losing our money.) People die sitting at a bus stop or walking their dog. We may try to avoid risks, but we really cannot. The truth is there is risk in everything if you do not know what you are doing. Driving a car sober and correctly is not very risky, really. Statistics show that. Driving a car impaired or sleepy or without the correct training is very risky.
So it is with the markets. Many make money. Many lose money. Many attempt it without the training and education they need. They wouldn't think of rock climbing without training and safety ropes, etc., but many naively enter the tricky waters of trading totally unprepared.