What can you expect from a career as an independent trader?
What can you expect from a career as an independent trader? Apart from profits and material gains, you’ll be able to achieve financial and personal independence. The satisfaction in being self-employed and successful will only add to the pleasure you’ll derive from being able to devote sufficient time to your friends and family. You will be taking part in creating the “big picture” along with thousands of big banks and brokerage houses, private and institutional investors and speculators, central banks and governments, and large international export and import firms and many others. And if you don’t seek it on purpose, success will inevitably bring you recognition and respect among your peers too. Knowledge gained from forex trading is useful in life
But the most important point is that the knowledge that you’ll gain by trading forex, and having a good understanding of fundamental analysis and economical events, will grant you the literacy that will be useful to you throughout your life. Even if you are perfectly content with a non-trading career, and are happy with your full-time job with little understanding of where the economy is going, you’ll eventually find out that to protect your nest egg, you do need to know more about economics and trading, and that by ignoring the risks related to currencies, you’re not isolating yourself from them. Yes, many currency traders do stupid things, and speculators do often waste fortunes through overleveraging, and gambling, but that does not make the hard-working idiot who doesn’t know how to protect his hard earned cash any smarter, does it?
Think of the hyper-inflation era in Germany. Or the collapse of the ruble in Russia in 1998. Or the Argentine default that wiped out the savings of millions of hard working people. Or of the recent collapse of the British pound which halved or erased fortunes in the course of about a year. Or of the dollar devaluation and high inflation in the US during the 70’s. Think of how the Japanese exporters were bankrupted because they couldn’t properly anticipate the rise of the yen in 2008. Or the currency crisis of the advanced Scandinavian nations in the 1990’s. The list could really go on and on and on.
In all these nations, well-meaning, reasonable people had cocooned themselves into believing that ignorance about currency trading is wisdom, and diversifying your basic assets is speculation. But one morning they woke up to find their dreams crashed by economic realities. Their savings were halved or reduced by a third overnight, but who did they have other than themselves to blame if they hadn’t taken the time to learn about risks that arise from ignorance about currencies and economics?
As with most things, the truth about forex is somewhere between the extremes: Forex is not a get-rich-quick scheme. But forex is not, as a lot of people seem to believe, a chance game, or just another name for online gambling either. Forex is a business, in some ways akin to investment, where your returns are proportional to the exertions that you make. If many of us find the workings of the currency markets unfathomable, let us remember that it is very hard to understand something without learning about it. The likes of George Soros, Jim Rogers, David Tice are not successful in this business due to exceptional superhuman skills. But they do know how to say no to herd psychology, how to refuse to be drawn into the vortex of bubbles and mania, and they know the value of a good medium-term investment based on facts, fundamentals, realities, rather than the teachings of gurus, political spin, well-wishing or doomsaying. Summary
So let us summarize the points we’ve made in this text which we hope will be helpful in clarifying some of the worries and fears in the mind of the beginning trader. There’s nothing exceptionally dangerous or difficult about the forex market in comparison to any other market; currencies usually don’t go to zero, and the unleveraged account is in fact in no danger at all of being wiped out under normal circumstances. Stupidity, and reckless behavior or wrong in any business, any market, and any career, the forex market is no exception to this. Ignoring currency trading, dismissing forex as speculative gambling is as reckless as ignoring inflation and interest rates when making basic financial choices: Currencies are the building blocks of all kinds of economic activity, and there’s little difference between taking a mortgage, or getting a credit card and hedging and managing your currency exposure through currency trading, as long as you do not overleverage, and don’t do what you don’t understand.
Great profits are possible in the forex market, great returns are achievable if you work hard and place logic and reason above emotion and sensation. If you think that you’re capable of this, don’t hesitate to begin your career today. If you already trade other markets, your experience in forex will widen your horizon, and enhance your skills and vision. If you’re new to trading, this is the field where you’ll get priceless education and invaluable experience by learning what moves the markets, and what drives economic developments. And on top of that, there lies the greatest reward of them all, the goal of all trading activity: material gain beyond anything you’d expect to be possible, if you’re sane and sensible and will not gamble your assets away.
So if you feel that you’re ready, go ahead. In the next chapter you’ll find some details on how to open an account and begin your trading career.