Monday, June 25, 2007
What is the best company to go with when trading Forex? -
i am just getting into the market and am looking for a little info/advice!!! The above posters are extremely myopic in their view of investments. Any investment can be risky. If you lost $100,000 in stocks/ETF and you lost $100,000 in 4X, which is riskier based on those figures? Both are equal. The questions you need to answer before you start investing are: 1) What is my income/return requirements? 2) What are my time horizons (when I d like to see returns)? 3) What is my risk tolerance level? When you define those 3 things, that will help you pick the type of investments you want to get into. For example, me: I want (1) maximum profitability in (2) the shortest amount of time and (3) I have a very high risk tolerance level (this is a very simplistic answer to the above 3 questions), therefore I trade the derivatives and 4X markets. Anyone that tells you to stick with ETF s or stocks have very low risk tolerance levels. That may be great for them, but if you have a higher risk tolerance level, it s not for you. Most people that trade stocks, etc., would not cut it in the derivatives or FX markets, they don t have what it takes. If they get freaked out at losing $2000 in stocks, they ll definitely lose it in the derivatives and FX markets. The reason the FX and derivatives markets carry more risk is because of the leverage involved. In stocks, you trade 1:1, or if you are leveraged, 2:1 max. In the derivatives markets, it depends on each individual contract, but about 40:1 leverage would be about right. In the FX (you can choose how much leverage you wish), you can have leverage of as little as 10:1 or as high as 400:1, depends on what you want to choose. The key is to define what kind of investments suit your personality, what is your trading style (are you a momentum, swing, day or position trader) and above all, LEARN, LEARN, LEARN. You never stop learning when it comes to trading. The moment you think you know it, be aware, that s when losses will set in. And most of all, don t let anyone else tell you what s a good investment or a risky investment. What may be a good/low risk investment for them, may not be for you. I have seen 2 different people trade the exact same methods - 1 loses money while the other one makes money. Why? Because that trading method suits the personality and trading style of one trader, but not the other one. Think for yourself and do what fits naturally with your style and personality. Just my 2 cents I would go with forex, but if your just getting into the market my advice to you would be to stay away from forex. This is one of the most riskiest investments you can make so be careful my advice is to start with some ETF s and Mutual funds then stocks and lastly Forex. Plenty of good advice on forex here. Forex isn t for amateurs. If you don t believe me, see what Cramer has to say about it. (He said he never lost so much money, so quickly, except for being robbed.) Forex investing is usually a bad idea. Most companies are not legitimate (I believe that offshore currency trading may violate CFTC rules). I d stay away from it.
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