FOREX is the term used for Foreign Exchange investing. It's grown in popularity because it allows investors with as little as $1,000 to $5,000 to gain 75% to 200% returns in a few months.
Doesn't that sound nice?
But please read this about my experience before you invest in FOREX.
Quick note: you'll lose less money trying to earn a living through blogging!
My Story
I was writing web site content for a client who traded FOREX. He had an office that was about 1,000 square feet. He had a bank of computers where he tracked the market activities. I wrote his site and spent time talking with him about FOREX. He was in his late 20s, bright, good-looking and completely confident in himself. He told us he was trading up to $25,000,000 at any one time.
After several months, he wanted to launch seminars and he wanted help promoting them. I got media coverage through PR Web and also KCAL-TV 9 in Los Angeles. The more I learned, the more intrigued I became about FOREX.
The Concept
It's simple. FOREX, or Foreign Exchange, is simply one nation trading currency for that of another country. Foreign Exchange is an enormous industry that would swamp the stock market.
The Basics
You buy in pairs of currencies being traded against the other. The popular pairs, at least in the U.S. are: the Euro/US, the Yen/US, the Canadian/US, the Swiss Franc/US and the British Pound/US.
The world's major currencies account for most of the world's Foreign Exchange activities. Makes sense, or should I say, "cents." A selling point FOREX traders make for potential clients is to say, "you only need to trade a handful of currencies. But there are so many stocks to choose, how can you predict a winner?"
If you want to learn more about Foreign Exchange, and I suggest you do, make a stop at www.Investopedia.com - one of my favorite investment web sites.
My Story - Continued
I studied FOREX and even the handouts my client used in workshops and trainings. I got a demo account and began practicing making trades. Like many independent brokers, my client had an account with CMS Forex, a reputable company in New York City that has a trading platform available.
Through them, I set up a demo account.
But, I figured, since I was helping market this person why shouldn't I let him trade some of my money? I approached my financial advisor - the one I trust as I wrote in an earlier post - and we agreed to let him handle $5,000.
I don't remember what combination of currencies he was trading, but the first week he earned a 50% return. My wife, always the pragmatist, said "pull it out." In other words, let's walk away with a gain.
But his strategy was trading for the long term like 6 months to a year.
We went on an extended vacation for a few weeks and I noticed the gains were lost. That's to be expected. But then, they dipped lower and lower. When you begin losing money in FOREX, you can put in "stops" to protect against further losses.
But the account kept losing money and I sent him an email. When I returned, my account was at $00.00!!
So he called me in to his office to talk privately and mentioned that he never trades small amounts like $5,000. He starts at $10,000 and higher and was trading mine on a platform with other larger accounts. That meant, when the market dipped and went against me, my account wasn't able to handle the dips like the large accounts could.
In short, he said he mis-managed my account and gave me a writing assignment. End of story.
"But wait," I asked, "are you going to replace my money?"
He shrugged his shoulders and said, "it's only money - and it's only $5,000."
But that was from our mutual funds.
My wife was quite angry. We had other people lined up to refer to him, but he basically went on as business with usual with me. Shortly after that, I stopped marketing for him and he may be out of business today.
I got a notice from CMX that they no longer service his accounts.
I did sign a number of disclosure papers when I signed up with him, so I don't know how easy it would have been to sue him for mismanagement.
But a word to the wise: I believe you can make money with FOREX. But before you spend money on going to seminars, buying tapes and books read all the information you can for Free. I know a man who spent $3,000 attending a seminar with FOREX Made Easy and I know he practiced. But I don't know if he made any money.
Go to a Meetup.com group in your area and see if they have a FOREX trading club.
Lastly, as in all investments, be willing to build money slowly and learn all you can. Don't rush. It will only get you into trouble.
No comments:
Post a Comment