Forex Trading

Thinking of Investing into Forex Trading?5 Reasons Why this is Not a Good Idea

  • Pretty much every article you will read on the internet will be somewhere along the lines of “Forex market is one of the largest markets in the world.” Truth be told, this is actually true. Still, there are many factors which dictate whether or not Forex trading is the one for you. Here are the 5 reasons why this sort of investment is of no good for you.

    1. You don’t possess the money

    The reason why so many people are switching to bitcoin nowadays is that you don’t need a tremendous amount of money – and Forex, on the other hand, does. If you are looking up every penny in the hidden pockets of your clothes or underneath the couch, then Forex trading is not the one for you.

    Indeed, this isn’t an exact science, and every investment needs a certain amount of cash – but Forex is a little bit of a special case. Leverage and margin allows you to make big investments with very little capital – or at least, that’s the general rule. With Forex, this won’t work unless you use risk capital – which is not the money that you would use for a grocery run.

    2. You don’t know the waters

    Changing the currency of your savings for a trip doesn’t count as Forex trading. Obviously, the brokerage will still trade your money even if you cannot tell the difference between a currency pair quote and a bowling score. Before you start changing money around, you should at least learn the basics of the market, or the mechanics behind a trading system. You can also learn on-the-go, but you may want to open free demo trading account first and learn whatever you can from there.

    3. You don’t take well to losing

    If you get involved with Forex trading, you need to be aware of the fact that there is going to be trading loss at some point. Sure, there are areas in a person’s life when distaste for loss and a refusal to give up might actually be healthy for you (boxing, contests, etc), but Forex trading is not one of them.

    With Forex, you need to spot a losing streak from the very beginning and put a stop to it while the amount is still small. Granted, you are still bound to lose a bit – but if you are the type to give up at the first losing streak, perhaps foreign exchange is not the one for you.

    4. You can’t take risks

    We mentioned how taking too many risks is not healthy for your account; still, that doesn’t mean you should not take them at all. Still, while risks exist in all types of investments, Forex is a species of its own.

    Even if you go with an average leverage level, there’s still the risk that you will lose at some point. If you don’t like the idea of losing even a cent, then Forex trading is not for you. The same goes if you are too much of a risk taker; it’s very unlikely to be successful so many times in a row. Karma will eventually strike, and it will be glorious.

    5. You need a lot of time

    Forex time requirements are fairly flexible, and they can vary according to your schedule; still, this asks for more time than you think. You can’t just place a Forex trade and forget about it for the next six months, believing it will be ok.

    Currency trading means that you continuously have to stalk the market, the news, and any other sources of data that may influence your trades. A successful day trader will literally spend most of their day trading. A fundamental one may not follow the trades every day, but they will still have a calendar and follow the news feeds carefully.

    If you have difficulties finding time to even mow your lawn, then Forex trading might not be a very good idea for you.

    Final Thoughts

    To make things clean, the Forex market can be really profitable – but only for some people. While it may be possible to start with a little money, and you can work with the knowledge part on-the-go, there are still some people who might not benefit from Forex trading.

    If even one of the above points applies to you, then you may want to reconsider trading Forex and go for something else – for example, Bitcoin. Figuring these things out from the very beginning is definitely going to save you a lot of money.

    Shruti is a blogger & a digital marketing consultant at with lots of passion to write about technology, startups & other niches. She has contributed to a number of famous websites. She live and breathe in digital marketing. Her aim is to spread her thought-provoking ideas to all generations. Stay tuned with her at:@shruti_gupta01 or via skype : shrutigupta2811