Forex Trading ‘Get Rich Quick Schemes’ are too Good to be True
The international market in foreign exchange trading is worth a whopping US$5 trillion on a daily basis, and there are large numbers of individual forex traders whose fortunes depend on movements in this market. There are many instances of people who have built their fortunes thanks to their trading strategies, but there are much more examples of people who have wasted a great deal of their time and money on this business.
If you have ever considered taking up forex trading then you would have come across training programmes and schemes that promise to help you become rich beyond your wildest dreams. Many companies also offer trading software that has special algorithms that can help you trade easily and successfully so that you earn a great deal of money without putting in the effort.
Forex trading can actually be a very lucrative source of income but only if it is done in the proper manner. As a matter of fact, the Financial Markets Authority regularly receives more complaints about fraudulent foreign exchange trading schemes and these complaints tend to outnumber those against other categories of financial services. However, since many of these companies are based abroad, the authority can do little more than urge people to be cautious when embarking upon forex trading.
It has to be admitted that there is a basic problem with the forex trading business. Its basic premise is that a trader sells one currency to buy another if he feels that the latter’s value is rising. The money that he earns comes at the expense of another person who sold the same currency. Therefore, this business is very clearly a zero-sum game in that one person’s advantage comes on the back of another person’s disadvantage. What’s more, the transaction does not result in the creation of value and neither does the trader buy any productive assets. In short, this business is entirely about speculation.
Another problem associated with the forex trading industry is that traders have to pay quite a lot of money in order to take part in it. Not only do they have to buy proprietary trading software but they also have to pay brokerage on their forex transactions. Even worse, they may have to shell out a pretty penny to take part in forex trading courses. It can all add up to a lot, and put a lot of pressure on the trader to turn a profit.
It is indeed possible to earn big bucks via forex trading, but this only happens when the trader is able to read the market right more often than not. This is easier said than done because the market moves according to the wishes of world political leaders and giant financial corporations. Do you really think that it is possible to rake in money using a ‘secret’ algorithm or any other quick method? In fact, you should pause to question why the creators of the algorithm would bother selling their magic money making formula to others when they could just make piles of money themselves!
We are only human and it’s really hard to resist a good sales pitch that promises huge wealth for little effort. This is especially so when we really need money and are looking for a good source of primary or secondary income. However common sense should warn us against such schemes. It is indeed possible to earn money through forex trading, but it is going to take quite a bit of hard work. This includes studying the market carefully and staying abreast of political and economic developments all over the world. This isn’t easy and it certainly isn’t for the dilettante, but it has worked for some people.