HOLA
Active member
Can Forex Trading Make You Rich? While our gut reaction to this question may be a definite "no," we must be qualified in our answer. Forex trading may make you wealthy if you are a hedge fund with deep pockets or an exceptionally skilled currency trader, but for the average retail trader, rather than being an easy road to riches, forex trading can be a quick and rocky path to massive losses and potential poverty.
Forex is often seen as a search for quick profits. Statistics indicate that most ambitious forex traders fail, and some lose large sums of money. Leverage is a double-edged sword, where it can lead to huge profits but also to catastrophic losses. Counterparty risks, system failures, and sudden surges of volatility are challenges facing potential forex traders.
Unlike stocks and futures that are traded on exchanges, foreign currency pairs are traded over-the-counter without a central clearinghouse. The sudden move by the Swiss central bank caused losses of hundreds of millions of dollars for countless foreign currency traders, from individual small investors to large banks. The losses wiped out the trading accounts of at least three retail brokerage firms and one, the largest retail foreign currency brokerage firm in the United States, was on the verge of bankruptcy.
Unforeseen events are not the only risk facing forex traders. Here are seven other reasons why the odds are stacked against the retail trader who wants to get rich trading forex.
Forex is often seen as a search for quick profits. Statistics indicate that most ambitious forex traders fail, and some lose large sums of money. Leverage is a double-edged sword, where it can lead to huge profits but also to catastrophic losses. Counterparty risks, system failures, and sudden surges of volatility are challenges facing potential forex traders.
Unlike stocks and futures that are traded on exchanges, foreign currency pairs are traded over-the-counter without a central clearinghouse. The sudden move by the Swiss central bank caused losses of hundreds of millions of dollars for countless foreign currency traders, from individual small investors to large banks. The losses wiped out the trading accounts of at least three retail brokerage firms and one, the largest retail foreign currency brokerage firm in the United States, was on the verge of bankruptcy.
Unforeseen events are not the only risk facing forex traders. Here are seven other reasons why the odds are stacked against the retail trader who wants to get rich trading forex.