At first glance, Forex trading looks lucrative. The financial currency market is often characterized by dramatic swings, and if you know how to anticipate and work these swings you can make a lot of money.
Can Forex make you rich? That’s a different question. There are two sides to the argument, and it’s important to look at each one carefully.
First, let’s run through some numbers. If your starting number for trading is $5,000, for instance, and you make approximately 10 percent of your capital every month, you can become a millionaire in 5-6 years.
Sounds promising, right? Let’s counter that with some numbers from the other side of the ledger.
Specifically, studies have shown that one-third of all Forex traders don’t lose money, but that’s not the same as making a lot.
The wild swings of the Forex market can be as damaging as they are lucrative, so it often takes years to study to accumulate enough information to make safe, profitable trades.
The advantage of Forex trading over the stock market is that the mechanics of trading are typically easy to negotiate. Forex traders tend to have lower transaction costs, and high-volume traders can work the market to get orders executed at something near the desired prices.
But its also important that you study the market and the trends of the various currencies. There are literally dozens of programs that will show you how to this, and the basic techniques are fairly easy to learn.
The problem is that the learning process tends to be intricate and time-consuming, hence the long lead time when it comes to making a lot of money doing Forex trading.