Can Forex Trading Make You Rich? 

Can forex trading make you wealthy? Even if our initial reaction would be to respond “No” without any hesitation, we should qualify our response. Forex trading may make you wealthy if you are a really skilled currency trader or a hedge fund with enormous resources. However, rather than being a simple route to wealth for the average retail trader, forex trading may be a challenging path to significant losses and potential homelessness.

You will be more persuaded about the answer to the question “Does trading forex make you rich or not” if you consider the arguments below.

Forex Trading is About the Unexpected Events 

To better comprehend the danger associated with forex trading, think about an example from within the last few years. On January 15, 2015, the Swiss National Bank removed the three-year Swiss franc/euro cap of 1.20.

Numerous participants in the currency market, from tiny individual investors to major institutions, experienced losses of hundreds of millions of dollars as a consequence of the surprise move by the Swiss central bank. Losses in retail trading accounts devastated the capital of at least three brokerages, rendering them bankrupt.

Forex traders are at risk from more than just unanticipated one-off events.

Asymmetric Risk to Reward 

Experienced forex traders limit their losses and make up for them with big gains when their currency prediction turns out to be accurate. However, most retail traders go about it the other way, achieving modest gains on a lot of trades while holding onto a lost transaction for too long and suffering a significant loss. Additionally, you can lose more than you invested as a result of this.

System Malfunction and Platform 

Consider your situation if you have a sizable position and are unable to close a trade due to a platform issue or a system malfunction. This group would also include extremely volatile periods when orders like stop-loss orders fail. 

No Information Edge 

The biggest foreign exchange trading companies run extensive trading operations that are integrated into the currency market and have access to information that ordinary traders do not (for example, commercial forex flows and covert government involvement).

Currency Volatility 

Due to high levels of leverage, trading capital can be swiftly exhausted during times of extraordinary currency volatility. These occurrences can happen quickly and affect the markets before the majority of individual traders have a chance to respond.

OTC Market 

Unlike the stock and futures markets, which are decentralised and regulated, the FX market is an over-the-counter market. Additionally, this implies that no clearing body of any kind can provide protection for currency trades, which might result in counterparty risk.

Fraud and Market Manipulations 

The forex industry has occasionally seen fraud cases, such Secure Investment, which vanished in investor assets.

Forex rate market manipulation has also been widespread and has involved some of the major companies. For instance, five significant banks were each hit with fines totaling roughly  for attempting to influence exchange rates. 

Stop-loss hunting is a tactic that market movers frequently use to influence the markets. When they predict that retail traders will have set their stop-loss orders, these major organisations will coordinate price increases or decreases at such points. When those are triggered by price movement automatically, the forex position is sold. This might result in a waterfall effect of selling when each stop-loss point is activated, which can result in significant profits for the market mover.

Is Forex Trading Profitable? 

In the short term, which is defined as when measured in days or weeks, it is simple to be profitable. However, it’s typically far simpler to be profitable over several years when you have a lot of cash to leverage and a strategy in place to control risk. Many retail traders fail to make it through the first few months or years of FX trading and all this can happen if you have the proper knowledge and education about forex trading.

If you want to earn profits, it is important that you must know at least the base of forex trading. There are various institutions that helps you learn forex trading both offline and online. UAE has been the hub of forex trading, if you are residing in UAE and want to learn forex trading offline and online you can join Moneytize. 

Moneytize provides the best forex trading course in Dubai. They provide the forex trading course for every level. No matter if you are at the beginner, intermediate or advanced level you can join their classes. Moreover, they also provide one on one mentorship which will help you in gaining more understanding. You gain access to the power-packed learning where you would be taught about forex trading with the pace. 

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