Is Currency Trading advantageous for the little guy?
Friday, May 28th, 2010 at
8:40 pm
I’m in my early 20s and have just started reading up on forex trading. Is is true that i can use leverage using my 0 to make it equal something double or triple that.?
I am aware of the huge risk involved but does forex allow one’s cash to go further?
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yes, leveraging is used when trading forex and yes, there is very huge risk involved in this business. leveraged trading works by establishing a rate you can use for every dollar in your account. the money you put for the trade is the actual money you risk. it is called ‘margin’ or the amount you risk. leverage rates are normally from 1:50 up to 1:200 (note: for USA only up to 1:100). for example: If you invest $100 and leverage it at 1:200, then you have $200 to trade for every $1 in your investment (margin). If you start trading with your $100 investment, you can buy up to a value of $20,000 (200×100). check out this source. it will lead you to one of the leading forex brokers these day. browse through the site for more info on forex trading. you may then download a free forex ebook and a free demo account as well. all the best.
i personally just collect euros and british pounds. basically anything that is worth more than the u.s. dollar. i will just go to the bank and turn them in if i see a decrease in value
Typically, retail forex firms do not allow you to trade on the open market — you can only trade with them as the counterparty. Hence, as in a casino, you are playing against the "house", and when it comes to you vs. "the house", guess who typically wins?
The success rate of traders in retail forex is often debated, but many seem to claim that it’s at max around 5%. There’s probably no way to get verifiable numbers on that, though.
Odds are probably better on open, standardized futures exchanges such as CME, but this requires more money (maybe 10K minimum, to be on the "safe" side), and gets a little more complicated. And it’s still very risky.
It is if you know what you’re doing. Open a demo account and test your strategies.
babypips.com has good info for newbs
The forex market is a high risk high reward situation. You can leverage your deposit up to 400 times although this may be a little risky for a beginner. You need to leverage your deposit as the forex movements are often only a fraction of a percent and through leverage this will make a decent return. Doubling your money in the space of a few days is definitely possible but so is losing half your money.
While you are still young taking higher risks may be worthwhile as any losses will be minimal in the long term.