Forex Foolishness Will Lead to Loss of Money

Nobel Prize winner Anatole France once said, "If fifty million people say a foolish thing, it is still a foolish thing." When I read this I immediately thought of the hundreds if not thousands of scams that are being perpetrated on those interested in trading Forex. A scam is a scam no matter how you package it. And if someone makes a promise that seems foolish no matter how often they say it, it's probably not true.

These scams come in two ways. The first and perhaps biggest scam are the number of people selling automated trading systems to people who have little or no understand of financial markets or for that matter price theory. The investor buys the product for a small amount of money, $50 to $200 bucks, places $1,000 or more in a trading account and watches as if disappears. This is like playing the slots at Las Vegas or buying a lottery ticket, it just costs more. Because the Forex market is unregulated all that can be hoped for is that people who do this don't repeat their mistakes. Trading in Forex requires self-regulation meaning self-thinking.

These scams remind me of TV commercials that sold people land they had never seen in Florida in the 60s. The land was there alright but most of it was alligator and snake invested swampland. I doubt that many of those people went out and bought land they hadn't seen in Alabama. That would of course have been, foolish.

The second scam is Forex Brokers who encourage traders to trade at high leverage and with little trading knowledge. The temptation is there and many, many people take the risk. Not all brokers do this but for many of them to survive they need to open new accounts everyday as 90% of traders fail. Again foolishness. As Ecclesiastes says, "A chasing after the wind."

Forex is an incredible trading opportunity but those who enter it need to do what they would do to learn anything that is new. They need to educate themselves well enough that they can make sound decisions about how they wish to approach Forex. Will they trade themselves or will they find someone to trade for them? Both are viable methods, but each requires a different approach.

Here are several things you can do to develop a solid trading style:

Learn about the methods of analysis. Fundamental analysis are the "becauses" of why things happen. Technical analysis attempts to use different charting techniques to trade. Both have their limitations because there is no way to know all of the "becauses" and regardless of how you try to "trap" price on your chart, you can't. You will need to find someone that will help you find those places in the market where prices are no longer efficient. (If you didn't understand that last sentence, then you have much more reading to do. Don't feel bad because most traders don't understand this and how it applies to the methods they try to use when trading.)

Find a good mentor, someone you can meet with or a websites that you see online. Many of these sites will answer a wide range of questions that you have.

Time is your best friend and remember don't be fooled twice. Use discernment. There are good solid trading systems that you can find that will give you the proper tools to make a good investment and in the long run produce profits.