Friday, 12 December 2014

Academy of Financial Trading – Forex Markets

Earlier in the week, we provided you with some “interesting facts” regarding Forex trading, and the monetary sums involved on a daily basis.  Let’s now look at things from a slightly different angle.

Online trading, as we often mention, is one of the very few occupations (yes – occupations!!) which people believe that they can succeed immediately in, irrespective of their background or specific knowledge in the subject matter. 

We often refer to day traders as “retail traders”.  This is the industry term for a regular person who has opened an account with a broker, and has committed some of their hard earned capital to this broker in the hope of generating a return – in most cases a substantial return.  This person also has very little experience of the financial markets, or of how they work. 

Let’s put some figures on the table.  Did you know that a recent study revealed that 99.6% of retail traders are unable to achieve more than four back to back profitable quarters?  Let’s put that another way – only 0.4% of traders achieve consistent profits quarter over quarter in one year.  Are you one of those? 

Some investment banks are known to allocate up to 20-30% of their funds into the Forex market.  This generates between 40-60% of their total profits - by far their most lucrative endeavour.

We were recently given a great analogy by a student – trading without an education, without a proven strategy, without learning to trade, is no different than you standing on the 1st tee at St. Andrews Golf Club, beside Rory McIlroy, then taking all your potential trading capital and betting on you to emerge victorious after 18 holes.  It’s just not going to happen, is it?

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