Is Forex worth your time?

Is Forex worth your time?

Independent trading or social trading? Two modern ways of making profits from online currency trading. What to choose?

My colleagues at work, knowing that I trade in my free time, often ask, if it is profitable, and is forex worth spending time on, if you don’t have a dozen thousand dollars?

I’ll try to describe forex in a concise, easy and comprehensible way. I’m going to describe such ways of working as independent trading and social trading. So, first things first.

Way 1. Independent trading

Today there are a lot of offers in the market of services to transfer a client’s trade to the interbank market. However, among all that diversity, it’s important to choose the most reliable company, which will serve as a real broker between you and forex market. There are numerous stories on the Internet about traders who were cheated by a broker and were disappointed in forex. In fact, these stories result from traders’ carelessness when choosing a a brokerage company. Such clients have not learnt about such “broker’s” reputation or about other clients’ opinions of its work, haven’t read the terms and conditions and offer contract (if the clients were given them to sign at all) before opening an account. Such companies, or dealing centers, making profits from careless clients, are called “kitchens”.

They aim at attracting as many clients as possible, so the minimum deposit amount to open an account is just a couple of dollars, and it can be topped up through the terminal even at a local shop. Often slippages, disconnections, orders failures are a regular practice of dealing centers, which play against their clients. To make sure in a broker’s credibility, one can open a trading account with a minimum deposit and trade for some time.

Only this way one can independently assess the quality of services, provided by a broker. You can often find on the Internet both negative comments about a reliable company, written by its rivals, and compliments to dealing centers, defrauding their clients. I myself, before choosing my broker, who I have been successfully working with for several years already, read the comments about one or other company on the forums. They were often diametrically opposed.

So, I decided, according to the principle “trust but verify”, to learn, how the companies work, myself and opened a few accounts with minimum initial deposits. From four selected brokers I finally chose the one, whose conditions and services met my expectations.

Trading in forex through a real brokerage company is a serious engagement, when clients’ orders are transferred to the interbank market. This business at the first step needs much time, to learn to understand forex and predict further currency rates moves correctly and make profits finally. Then, if your forecast is correct, you’ll earn, and in case of mistake, you’ll lose a part of your deposit. A couple of hundreds dollars are enough to start serious work in forex. When you open an account, the broker will ask you to pass verification and submit necessary identification documents. A broker won’t play against you, it will gain more, if you make profits and earn through it for as long time as possible.

Way 2. Social trading

If you can’t afford to spend much time studying the financial market and its patterns, you can participate in social trading. It is a service on copying trades, which has many advantages for beginners and enables them to use more experienced professionals’ knowledge.

What to choose?

What way is more preferable? Everything depends on your skills and objectives.

If you are only beginning forex trading, I would recommend starting from social trading. There you can understand the essence of exchange trading, follow the professionals’ trading style, copy their trades to your account, making profits at the same time. Social trading platform is fully automated. There one can look through news feed and study online functional monitoring of the accounts, registered as trades suppliers.

If you have enough spare time and if you are confident in your skills and knowledge to analyze price charts, then choose independent trading. As long as you choose your broker carefully. There are my colleague's recommendations, how to distinguish a broker from a dealing center I strongly suggest you read them to avoid serious mistakes.

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