Is It True That Forex Is a Bad Investment?

You may have seen it written in some places that Forex is a bad investment. I’m not completely sure why anyone would say that except that it was something that they heard or that they simply have not had good fortune in trading the Forex market.

Forex is a bad investment only if you’re on the wrong side of the market movement. If you’re short in a bull market in your going to lose money and if you are long in a bear market you’re going to lose money. With this in mind it’s easy to see why some say that there no such thing as bad investments, just bad investors.

For those who are prepared the Forex market can be a marvelous investment. One reason why is that Forex currency pairs can trend quite beautifully. As we all know getting in on the long-term trend with excellent momentum can yield substantial profits. We must also keep in mind that there are number of currency pairs choose from so we have numerous opportunities to find trends within the various currency pairs.

Another reason that Forex can make such a tremendous investment is the leverage involved. It is possible to obtain leverage of 100 to 1. Essentially this means that relatively small movements within the Forex market can yield profits in large dollar amounts. Leverage is one of the principal things that attracts so many investors and traders to the Forex market. Properly used leverage simply translates into higher potential returns on investment. Quite naturally, it would be naïve to only mention returns on investment as leverage also plays a huge part in each individual traders and investors level of risk. Typically where there is increased possibility of profit there is also increased possibility of risk. Every successful Forex trader realizes this and places their trades accordingly.

So in essence you can see that the statement “Forex is a bad investment” is only true for some of the people some of the time. For those who have prepared themselves to profit for the long-term the Forex market is indeed full of outstanding investment opportunity.