Forex trading: fraud or a real way to earn money?
Forex trading is a complex and risky activity that can lead to both significant gains and significant losses. That is why Forex trading has a mixed reputation.
On the one hand, Forex trading can be very profitable. In 2022, Forex trading was worth more than $6.6 trillion. This means that more than $20 billion worth of trades are made in Forex every day.
On the other hand, most Forex traders lose money. It is estimated that about 95% of Forex traders suffer losses within the first few years of trading.
The main problem that causes Forex currency trading to have a bad reputation is the following:
- 95% of traders lose their money due to poor risk management, greed, over-trading, and lack of knowledge. When some traders realize that a get rich quick scheme is not possible in the Forex industry, they start saying that trading is a scam.
- Marketers in the trading industry (Forex signal promoters, online course promoters, trading product promoters, etc.) create aggressive and very often fraudulent and unethical marketing promotions. Such unscrupulous promotion destroys the reputation of Forex trading.
Many brokers think they can manage a portfolio (trading account), risk 5%, 10%, 50% or more per trade and double their account every month. This is the wrong way to trade and many people lose their money because of the huge risks involved. This is why many traders ask the question, "Is Forex trading legal?"
Thanks to the internet and electronic trading, investors around the world have access to active trading and investing and can participate in more and more markets. They can decide to trade stocks, currencies or futures contracts; their decisions are based on risk tolerance, convenience or account size.
Traders will have a hard time winning if they are not available during normal market hours to enter, exit, and properly manage trades. Traders or investors should choose options based on the time they can devote to trading. For people who trade stocks, it is possible to have both steady growth of funds, dividends and losses when the stock depreciates.
However, today, many different trading tools are available to active investors and traders; they can even learn how to trade with virtual money and trade without risk. One can also choose other trading instruments such as blue chip stocks, high growth futures and others; it all depends on the trader's preference.
Forex trading is an opportunity to make a lot of money, but it is also a risk to lose it, but this does not mean that it is a scam. If you follow the principles of proper risk management and learn how to trade correctly, you will be able to make profits in the foreign exchange market.