Feb 7, 2018 5:32 AM
What is the reality of Forex Trading. Unique Reasons
Doing forex trading yourself is nonsense, you will (almost) guaranteed fail. I'm sorry, but making money in the foreign exchange is simply not going to work. 99% fails.
Do not get me wrong. Maybe you are very intelligent or do you have a genius technique. But there are secret rules and invisible walls whose chance is simply extremely small that you would ever break it.
Most people who start with forex stop within a very short time, this has a good reason.
In this article I tell you exactly why 99% fails, and why you would fail. Finally, I tell you how the last 1%, does earn money with forex.
Content of this article
- How do I get my Forex knowledge?
- Bizarrely high profits, the richest people in the world and forex
- Daytrading and its costs: Casino always wins
- The myth that forex is cheaper
- Forex day trading goes with higher profits but also higher losses
- The siege world is dominated by professionals
- You can not beat the professionals
- The higher the target return, the higher the risk
- The danger of using a lever (leverage) as a beginner
- The dangerous of being "unlikely" trade's as beginner
- Heads or tails?
- The stressful of self-forex trading
- A realistic forex method that works (that's how you can hear the 1%)
- Way # 1 to belong to 1%:
- Way # 2 to belong to 1%:
How do I get my Forex knowledge?
Read, read and read again. I have read about research and research into the opinions of the greatest gurus. Looked at gurus in the siege world. My marketing background used to analyze the marketing of forex brokers.
I have had forex experience for five years and last of all I used a lot of my common sense for this article.
Bizarrely high profits, the richest people in the world and forex
Let me start with a conclusion where I have come up with my common sense.
Once upon a time there were two of my friends who heard about forex traders that achieved huge returns. They themselves started and also achieved high returns in a short time. They were lyrical about their new way of earning money. I was skeptical.
I was disturbed, I was an idiot and the chance of my life I let go. At least, that was what I was told.
That they achieved 20% per month return sounded to me simply too good to be true. This was my counter-argument. I said: How is it possible that people can achieve so much profit with forex, but that there is nobody in the forbes500 government list that has accumulated wealth with forex trading?
That is how your assets would look like if you trade for 8 years with a start-up investment of € 10,000
- Year 1: 10,000 euros will be 30,000
- Year 2: 30,000 euros will be 90,000
- Year 3: 90,000 will be 270,000
- Year 4: 270,000 will be 810,000 euros
- Year 5: 810,000 euros will be 2.4 million.
- Year 6: 2.4 million becomes 7.2
- Year 7: 7.2 million will be 21.6 million
- year 8: 21.6 million will be 64.8 million
Here a picture that my business partner wanted to share to emphasize the bizarity of the above facts:
The above simple calculation says that the bizarrely high returns that are promised with forex should mean that you would belong to the 500 richest in the Netherlands within 8 years . I have gone through the entire Quote 500 (Dutch top rich list), there is no one who has amassed his fortune with forex.
This does not mean that you can not get rich with forex, it does not say that there are no millionaires by forex, or that people have not partially made their money with forex, it says that it is heavily exaggerated how much you can earn with forex.
Let me say that the richest and most successful investor in the world (warren buffet) does not disapprove of forex. His experiences with forex are scarce for a reason (even though they were successful). But they are there and these trades were all focused on the long term.
For me it says a lot that the richest investors in the world do little forex trading. It tells me a lot that they have never done daytrading.
In the end I got myself over to also do forex trading. Fortunately, I did not lose as much money as my friends. Nowadays I make a profit with forex. Not the bizarre high profits that are promised but enough to be happy, more than I do with stocks.
Daytrading and its costs: Casino always wins
Day trading is selling the currency or a stock you bought within a day.
When it comes to forex, it usually concerns forex day trading.
And I'm not saying that it's gambling, but it does have a lot of it. Just as with poker, there are people who win big numbers time after time, here it is a fact that they are so good that they are no longer gambling.
This is how it works with forex. That does not mean that statistically the odds are that you will lose money. It is true that sometimes you and sometimes another trader wins money, but that your forex broker ALWAYS wins money. You always pay to your forex broker, whether or not you win, they always win.
The myth that forex is cheaper
You often hear from people that forex trading is cheaper. That is only the case if you look at it in a certain way.
It is true that you usually pay less per purchase or sale than you do with a share. Only almost everyone who does the currency trading (forex) does day trading. An investor in shares usually does that once every few months, per year, or years. A forex trader often buys and sells the same day.
Because of the above, forex trading you will therefore spend a lot more on your broker than on other forms of investing. So much that if you do not know what you are doing, you probably lose your money.
Forex can be cheaper. But that is only true if you hold a trade long, and are not a day trader, as warren is not a day trader.
Forex day trading goes with higher profits but also higher losses
The profit and loss of a day trader is much more volatile than with other types of investment.
This does not mean that it does not work. But it does mean that you can take a lot of profit for a short time, and then you can lose everything in a short time.
The siege world is dominated by professionals
With forex it is so that if you make money, someone else loses it. Or that both of you are losing money because of the costs.
The best forex traders work for funds. It is not that if you add up all the forex traders, and grab the average, you can say what your average forex opponent is. You can be better than most forex traders but still lose a lot of money.
The professional forex traders play with much and much more money than an amateur. This means that if, for example, three large professionals bet 90,000 euros on the idea that the dollar goes up or down, there may be ten amateurs who jointly bet € 10,000.
So € 100,000 is being used by 13 traders.
Since the professionals use 90% in this trade, it means that you take up 90% against professionals , not against all amateurs who play along.
Let's be realistic, what is the chance that you as an amateur are better than the professionals?
You can not beat the professionals
Consider the following
- Do you have as many years of experience as these traders?
- Have you followed as many courses in forex trading?
- Do you know as many traders to gather the latest insights?
- Are you literally trading all day long, all week long?
- Is there a big company behind you that always supports you to get the right information and help you make better decisions?
If you can not answer YES to ALL these questions, then I can guarantee that your chances are smaller than a penguin wanting to fertilize a tiger .
I also disregard the fact that the companies that hire forex traders only accept the smartest people. It's about a lot of money, they do not want to lose it, they do not play games.
What I also disregard is whether or not you have the "guts" to do it. Can you sleep well if you have all of your currency in the currency, which you know is going on at night, and you know you can lose everything?
Not only this, it is a fact that you will lose a lot of money, even the best traders sometimes make this happen. How do you feel when all your money seems (temporarily) to smoke, and more importantly, do you still make good decisions?
Most people do not make good decisions when a lot of money is at stake for them.Professional forex traders usually play with someone else's money, which is why they are better able not to make their emotions decisions.
Beyond all the reasons mentioned, there are probably still ways why you and I can not beat the professionals. But let me summarize it again for you. The chance is zero that you beat the professionals in the long term.
There is a way to beat the professionals without all of the above qualities, how will I tell you later in this article.
The higher the target return, the higher the risk
This applies mainly in general. There are exceptions, but in almost all cases it is true that if you aim for a high return (say% 100 growth in a year), the chance is high that you will lose money instead of winning.
The fact is that the higher yield you want to achieve, the more risk you have to take.
This can only be done in ways such as leverage or by doing an unlikely trade.
The danger of using a lever (leverage) as a beginner
Using a lever is an option where you can double the potential profit and loss, multiply it six times or even attenuate it.
This means that if you double dollar in value, you can earn two dollars instead of one dollar. Or even sixty dollars.
There are people who can do it well, because you can achieve a lot in a short time.But you can also lose a lot in a short time . I would strongly recommend not using a lever if you are a beginner. You do not want to take this risk as a beginner.
Indirectly, you borrow money from your broker when using a lever. you can not earn $ 20 if you buy your 1 dollar and he only goes up 1 dollar. The other way around, if you buy $ 20 you can theoretically not lose all your money if the $ 20 loses $ 1.Unless a lever is used, so.
Here is some more Wikipedia explanation about how a leverage (leverage) works .
It is complicated matter and in practice you do not have to worry about it. In practice, you just click on a lever button and choose "x1", "x30", "x60", or something similar.
The dangerous of being "unlikely" trade's as beginner
Usually the smaller the chance of success is that a trade succeeds, the greater the loot if it succeeds.
If many people do not value a coin, then it is also worth little. If almost everyone estimated the currency low and suddenly it turns out to be a good currency, then it is possible that everyone suddenly starts buying, which increases the value of the currency. If you were the only one who believed that the currency would rise (and buy) to the point that no one had any faith in it, then you are the one who benefits most from the increase.
I hope I explain it a bit clearly, but it simply means that the most improbable scenarios give people the most . You can earn a lot if you always speculate properly, but the risk is very high, because there are always reasons that the other traders (and especially the professionals) move in a certain direction.
Who are you as an amateur to estimate that a coin should or should not be of higher value if professionals say otherwise?
I can not recommend doing unlikely trade's as a beginner.
In order to make huge profits, all eggs are often placed in one basket (all your money on 1 trade). I personally think that is not a sensible plan, especially not as a beginner.
Heads or tails?
As a beginner with a lever play or bet on unlikely is just like head or coin.
What if you had a euro coin, and every time you threw it you had the chance to win one euro extra, or lose one euro.
- cup = win one euro,
- currency = lose one euro
Every time you throw the coin you pay one cent to participate.
What if you had a euro coin, and every time you threw it you had the chance to triple your money, or lose everything.
- head = tripling your money,
- currency = lose everything?
Would you do it?
You can be lucky twice and make a lot of money. But the chances are that soon your coin will end up wrong, and then you will lose everything:
Make sure you know what you are doing, or leave the risk to the experts.
Read more about investing for beginners here .
The stressful of self-forex trading
In addition to the fact that the methods just described are not sensible to try as a beginner, I can also tell you that it can be very stressful.
Did not you want to become a forex trader to improve your life? Forex trading is hard work and money is constantly at stake.
Apart from the question whether it is realistic to expect that you beat professionals you can ask yourself whether you have the energy, pain and other things to try . I say try because statistically the odds are the greatest you lose. Even many professionals lose, because even the professionals play against even larger professionals who have more money to spend than they do.
A realistic forex method that works (that's how you can hear the 1%)
I hope that I have made you understand that the chance is small that you will succeed in becoming successful with forex trading. I say that 99% of the people who start to forex lose their money, but I also say that there is one percent that can earn a lot of money.
There are two ways to belong to 1%:
Way # 1 to belong to 1%:
Working working working working working working working.
You will have to read your drowsiness, meet experts, lose a lot of money and spend many years to be able to measure yourself to the professionals. The chances are that when you do all these things, you fail because you are simply not financially smart enough, or because you do not have the personality of a successful forex trader.
If you want to trade yourself (and do not want to use the way below) I recommendiForex , they also support the Dutch market.
This is a way, but it is certainly not an easy way and you run the risk of losing all your money. This is the reason why I finally opted for the following method.
Way # 2 to belong to 1%:
Copy literally one on one the actions of the most successful professionals. This is what I have chosen to do.
These professionals usually do not earn as much as the unrealistically high amounts such as 200% per year. But you do see a lot in that 60% per year in return.
There is a system that lets you do this one-on-one. Automatically, you do not have to worry about it. You know that you can benefit from the highest possible returns possible in the forex world without stress or time.
The system sees real time what traders buy and sell. You can set that, for example, you follow a trader with 1000 euro. If he bets 1% on a coin, the system ensures that you also automatically use 1% of your investment. You can also distribute your money and copy / follow different traders 1 to 1.
You can arrange all traders in the way you are interested. Do you want to copy a trader that has achieved high returns for a long time ? You can sort on this. Do you want to copy the forex trader this year the highest returns, this is possible. You can also follow both traders. It may be useful to follow multiple traders if you want to follow different approaches to spread your opportunities.
Besides forex traders, you can also follow raw material and share traders on this website. I recommend not to immediately follow a trader with € 10,000. But with € 500. With € 500 it can make a difference.
I would say try it out, and let the system prove itself how effective it is.
Click below to start, registration is free: