Forex has been a point for endless discussion for years. While some people say Forex is nothing but gambling and fraud designed to deprive people of their money, others are convinced that Forex can be a major source of income.
Mass media also do not mind writing articles on the topic to boost their ratings. Not so long ago, RBK published an article on Forex issues in Russia. The author of the article says that there are many amateurs and compulsive gamblers in Russia and the entire Russian-speaking community. On top of that, he named several key problems common for the Russian-speaking Forex industry:
Forex and advertisement. Apparently, Forex is the world's biggest financial market. Therefore, it attracts million of people, both representatives of broking companies and retail traders and investors. Still, Forex brokers say trading Forex is easy and doesn't require a lot of special skills, knowledge, time and money (which is certainly not the case since serious trading requires a lot of time and energy apart form having initial deposit and is next to impossible to be combined with full-time or even part-time jobs or higher education).
Forex and leverage. Leverage implies borrowing money from the broker in order to boost the trading capacity and to be able to trade bigger amount of money. The bigger the leverage is the more money traders have to risk when loading their deposits to the full. This means that major mistakes may cost them a lot of money. The risk of losing the entire capital by getting a margin call increases. Today's leverage offered by brokers may reach 1:200, 1:500 or even 1:1000!!! This means that even minor currency rate changes may result in huge volatility in the balance of the trader's account.
Forex and fraud. Unfortunately, there are still isolated cases of frauds and fakes in the Russian Forex industry. They usually benefit from poor regulation and legal gaps. While, the Russian legislators are considering the draft law that will be regulating the relations between the client and the broker, it is a matter of months (or may be years). On top of that, when the law is finally adopted, minor low-cap brokers will have to quit. Well, it will be good news if they quit without taking their client's money with them.
Therefore, the expert concludes that those who treat Forex trading seriously, should open live accounts with major brokers , deposit decent funds in order to abstain from utilising high leverage and to stick to very conservative money management, being focused on defending the capital rather than pursuing big profits during the first months of trading.
Masterforex-V Academy's Opinion
According to the trading experts and members of Masterforex-V Academy, the author is right to some extent. However, all traders see losing traders, but amateurs eventually lose everything and get disappointed while professionals earn more than they lose.
Apparently, this guy is right when saying that traders need decent funds in order to earn more money without running major risks (thereby abstaining from using high leverage). It is like with driving a car: if you do not accelerate the car up to 200 miles per hour, the chances of getting into a car accident are minimal. The less the speed is, the fewer the chances are. Speed limits are designed for the sake of traffic safety. The same holds true for trading.
At the same time, Forex has nothing to do with casino if you came there to make money and treat this activity seriously enough. Obviously, if you came to Forex to gamble, then there is certainly no difference between gambling in a casino and gambling when speculating currencies. Forex trading is not a game, it is a tedious job. It certainly requires concentration and wise risk management but there is much more to successful trading than monitoring the situation and staying cool-headed. It is necessary to analyze a lot of information and to work out your own trading strategies that generate entry points unknown to the market.
The only thing that can change the amateur attitude to financial markets is proper training where real professionals teach you how to approach the market and trade it so that you could show consistent results on a regular basis and later turn this into a major source of income. If you are a beginner, you can visit the free school fro traders and investors under Masterforex-V Academy! Good trading!
