At the core, all you need to remember is that betting on a currency’s direction is speculation, not investment. When you buy Pounds or Swiss Francs or Euros or Yens, you don’t buy an ownership right into a firm that can grow its top and bottom line, and thus its equity and the wealth of its shareholders over time. You just hope that the relative value of the currency you purchased will increase. It’s a trade, nothing more, nothing less. Twenty years from now, it’s quite possible that the Euro and the dollar will still be close to parity. What long-term return can you then hope for from taking such a position? Meanwhile, companies like Facebook or LinkedIn may have made their owners rich – very rich. Primarily because they grow profit and you owner own some of it. Lucky you!
I should have studied finance. I don’t even know what a devaluation is. Instead, I am the proud alumnus of a two-hour webinar that taught me I could become rich trading foreign currencies. Rich! Do you understand? Rich!!! But a foreign-exchange investor is like an... oxymoron. And if you remove the oxygen, he or she becomes a moron. My first wife should be doing this. After all, it’s for ex… Definitely not for me!
Yes, you learn a skill and hope to make a killing. But the murdered one in the end may be… you. Most retail currency investors lose money most of the time. FXCM Inc. and Gain Capital Holdings Inc., two leading publicly traded over-the-counter forex companies, have reported that, on average, nearly 70 percent of investors had a net loss from trading in recent quarters. The average OTC forex investor drops out of the market after just four months, according to the National Futures Association (NFA).
Currency trading is the world’s largest financial market; $5.3 trillion changes hands every day, according to the Bank for International Settlements. There are zillion of market participants. Pension funds and multinational corporations operate in the space of course. But also all sorts of speculators, brokers, weirdoes and people with broken dreams…
And then there is… me. Both my shrink and a friend of a friend of my dentist who said he knows someone recommended I get a piece of the action.
Damned, why did I listen and choose to enroll?
Can you believe I can supercharge my bets with 50:1 leverage? Stock investors are amateurs. The U.S. Federal Reserve limits individual stock investors’ leverage (margin requirements) to 2:1. I say, 50:1 or nothing! If I have $1,000 I want to bet $50,000’s worth minimum. The dream! This kind of juice can lead to monstrous wins -- even in a market that moves little. But of course investors – really, speculators – can have their entire position vanish in days. How about that for magic! Don’t overleverage, they recommend. But I’m saying 10:1 is for sissies… Or am I deranged?
Sure, leverage can blow me out. But if you don’t mind losing $10 instead of a mere $1, gambling the house, unsleeping at night, discovering the true meaning of conflicts of interest (Brokers often buy what I sell and sell what I buy so I guess they trust my judgment big time, don’t they?), enticing pitches by people who truly don’t care, piling up credit card debt for the wrong reasons (as though there ever were a good reason!), just help yourself! Do forex by any means.
Yes I’m going to max out my credit card. Oh yeah baby! That’s what FXCM suggested I do when I started with them. Fastest way to open an account, they teased. Why not? I have tons of credit cards I must be rich. The combination of leverage and plastic is a dream come true. I can end up paying an upfront fee, a transactional interchange reimbursement fee, a terminal fee (yeah, I’m about to die), a payment gateway fee, as well as debt with as high an interest rate as 25 percent. And the Fed is looking to boost rates; can you believe the dream? It’s like paradise! Who dared say I can lose it all?
Hold on! It’s already tomorrow and I forgot to make money. Thank God today is the day! Let’s go back to those Polish złoty and Mongolian tugrik…
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| Image source: google.com |
I should have studied finance. I don’t even know what a devaluation is. Instead, I am the proud alumnus of a two-hour webinar that taught me I could become rich trading foreign currencies. Rich! Do you understand? Rich!!! But a foreign-exchange investor is like an... oxymoron. And if you remove the oxygen, he or she becomes a moron. My first wife should be doing this. After all, it’s for ex… Definitely not for me!
Yes, you learn a skill and hope to make a killing. But the murdered one in the end may be… you. Most retail currency investors lose money most of the time. FXCM Inc. and Gain Capital Holdings Inc., two leading publicly traded over-the-counter forex companies, have reported that, on average, nearly 70 percent of investors had a net loss from trading in recent quarters. The average OTC forex investor drops out of the market after just four months, according to the National Futures Association (NFA).
Currency trading is the world’s largest financial market; $5.3 trillion changes hands every day, according to the Bank for International Settlements. There are zillion of market participants. Pension funds and multinational corporations operate in the space of course. But also all sorts of speculators, brokers, weirdoes and people with broken dreams…
And then there is… me. Both my shrink and a friend of a friend of my dentist who said he knows someone recommended I get a piece of the action.
Damned, why did I listen and choose to enroll?
Can you believe I can supercharge my bets with 50:1 leverage? Stock investors are amateurs. The U.S. Federal Reserve limits individual stock investors’ leverage (margin requirements) to 2:1. I say, 50:1 or nothing! If I have $1,000 I want to bet $50,000’s worth minimum. The dream! This kind of juice can lead to monstrous wins -- even in a market that moves little. But of course investors – really, speculators – can have their entire position vanish in days. How about that for magic! Don’t overleverage, they recommend. But I’m saying 10:1 is for sissies… Or am I deranged?
 |
| Image source: google.com |
Yes I’m going to max out my credit card. Oh yeah baby! That’s what FXCM suggested I do when I started with them. Fastest way to open an account, they teased. Why not? I have tons of credit cards I must be rich. The combination of leverage and plastic is a dream come true. I can end up paying an upfront fee, a transactional interchange reimbursement fee, a terminal fee (yeah, I’m about to die), a payment gateway fee, as well as debt with as high an interest rate as 25 percent. And the Fed is looking to boost rates; can you believe the dream? It’s like paradise! Who dared say I can lose it all?
Hold on! It’s already tomorrow and I forgot to make money. Thank God today is the day! Let’s go back to those Polish złoty and Mongolian tugrik…
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