Trading Foreign Exchange and Contract for Differences on margin is highly speculative, it carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade on margin and/or invest in FX or CFDs you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some and/or all of your initial deposit(s) and/or investment(s) and may be required to deposit additional funds, therefore you should not speculate with capital that you cannot afford to lose….” – FX PULP

The disclosure above is from a reputable FX broker, FX Pulp. The quote is termed a disclaimer or risk disclosure and it is a regulatory requirement to forewarn prospective traders about what they want to venture into. This is one reason why most are scared about Forex coupled with some unpalatable practical experiences, but I bet this is why I like Forex trading because it gives me the impetus to tread where others fear.

In other businesses people venture into, hardly are they forewarned about loss (not in black and white as in Forex) hence they do not foresee the danger ahead.

Now tell me a venture that you may not sustain loss of all your capital and even run you into debt if care is not taken. I attended a convention recently where a speaker told of his bad experience in bakery business. Around us I see a lot of eatery outlets springing up and folding up in a short while. The reasons are not far-fetched.

According to the speaker he admitted he had no adequate information about the business, hence the inherent risks cannot be well managed and finally eventual collapse. So, it is clear here that all businesses are risky or carry elements of risk, the success of any depends on risk management in the broader perspective.

Same applies in Forex. Many lack in-depth knowledge. In the three-month-course I run I do put training as one of the requirements for Forex trading which translates to being well armed with information and knowledge. I do imagine what goes on in the minds of those who ask me what they can invest and possibly get, when they do not get a concrete answer.

I do parry this question because I see they do not get concerned about what they need to know about it. How can anyone be thinking of the amount to invest in what you do not know much about? This is one of the areas we fail in Forex and possibly other ventures.

It is noteworthy that Forex surpasses all businesses in the sense that, you can beforehand know the ACTUAL amount you can risk (or lose) in your trade(s) and also the ACTUAL amount you can gain.

This is called risk to reward ratio. Nearly all other businesses are speculative in that area.

In the FX Pulp risk disclaimer above, some keywords are spelt out there: 1. Suitability 2. Work for you or against you 3. Risk 4. Experience and 5. seek advice from an expert.

This explained in brief means that you should seek adequate knowledge (training) about the venture from a professional to determine suitability in terms of time, market interpretation, psychological frame of mind etc, who will guide you to know how to manage the risks and see how things can work for or against you.

This reminds me of the formal class training kicking off on Saturday May 25 from 1.00pm for both registered participants and observers who may want to join.

Secondly those who are successful in life are those who take risks but they manage to stay out of the murky waters being armed with the workings of their ventures.

Brokers may contribute to failure in forex trading too but that is why you should seek professional advice. Unlike some years back where brokers can only be reached online, now some have local representation. Luckily again we are having the representation of FX Pulp, a licensed and regulated broker with strict compliance whose platform has a direct feed to the liquidity provider and your orders are executed at market prices. There is no re-quote on orders and your funds are safe.

So why don’t you take and tackle the risks NOW!

Forex market analysis

As of the time of going to press and based on technical parameters and monthly candlestick chart analysis, there is still bullish pressure on GBP/NZD and GBP/AUD pairs. Going long on these pairs could yield good profit. I forecast GBP/NZD to hit 1.9600 area by June ending and GBP/AUD also in 1.6400 region. Happy trading.


Source: http://www.punchng.com/am-business/before-you-go-into-forex-trading/

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