How to make money on Forex? My reviews and experience

Hello! In this publication I will try to answer in accessible language the following question: "Earnings on Forex - reality or fantasy?" I will give real reviews of Forex from various forums, some are very optimistic, and some are very sad. And I will also analyze the development process of the Forex market in Ukraine and Russia.

I recommend reading this article to the end, and for especially lazy ones - at least the last section - “How can I make money on Forex?”.

Earnings on forex - reality or fantasy

I'll start with a brief insight into history. It all started from the moment when, in 1971, US President R. Nixon decided that the US government refused to convert the dollar into gold (that is, he refused the gold exchange standard).

This decision was the birth of a new economic direction, which later became known as "currency trading" (Forex). In currency trading, the exchange rate is completely dependent on the market supply and demand for a particular currency, and not on the equivalent of the currency in gold.

It turns out that Forex is a currency exchange market at the level of the interbank market at prices that depend only on supply and demand. Each modern bank has its own division of Forex traders.

Currency turnover in the Forex market every day is $ 4 trillion. An authoritative financial resource, Bloomberg, predicts a further increase in intraday turnover in the Forex market to $ 10 trillion in 2020.

In recent years, the Forex market is gaining momentum.

A lot of people, inspired by what they see on TV or on the Internet, decide to try their hand at being a Forex trader, starting to trade without relevant knowledge, thus making a very big mistake.

Trading on Forex without prior preparation can only be compared with a lottery! According to statistics, only 10% of traders are in the black. That is, out of 100 traders, only 10 are earning on Forex.

On the Internet, you can find a lot of information about earnings on Forex. You will be offered free trading robots, which according to the legend must provide fabulous wealth). In most cases, these free robots are effective in draining a deposit, as they use the Martingale method.

Also keep in mind that on most online resources, reviews of Forex are purchased. If they sell good advisers or robots, they are for a tidy sum, but you should already be a successful trader to distinguish a quality product.

The question of choosing a Forex broker is very acute, since for a beginner there is a high probability of running into the "Forex kitchen". Then, for a novice trader, a well-prepared scenario has already been prepared: trading on a demo account will seem understandable and simple, but when a trader starts trading on a real account, with a very real deposit, he will be put on a stick. Transactions will start to run with a delay. There are also knocking out stop orders hand-drawn quotes, etc.

If you are really interested in Forex trading, and you want to work and earn money exactly as a trader, then you have a very difficult way to search for materials and textbooks on the Internet. But, as they say, the main thing is desire and hard work.

The bottom line: Earnings on Forex for a trader is a reality, but only for 10 out of 100%. In addition to Forex traders, there are also investors, investing in Forex is much more interesting, but I’ll tell you about this a little lower.

The concept of the term "Forex kitchen"

Forex brokers use 3 types of technology:

1. Positions of the trader do not overlap on the interbank market. In this case, the Forex broker is interested in the loss of the trader, and the broker will have to pay any profit for the trader from his own pocket, so to speak. A forex broker operating on this principle is called Forex Kitchen. When a Forex company only enters the market, it has too few customers to collect a standard lot for transfer to the interbank market.

In addition, there is a possibility that one trader will win a big deal and the Forex company will not have enough money to pay off this trader and other customers. The actions of such technology, aimed at the loss of the trader, affect negatively on the reputation and feedback on Forex in general.

At the beginning of 2000 there were few Forex companies, and there were also not enough clients to hedge on the interbank market. But its time has made, we have reached a new level in this industry.

When the number of clients of the Forex broker already exceeds several thousand, the profit of Forex Kitchen equals the number of transactions multiplied by the spread. The number of transactions is almost directly proportional to the number of customers. The size of the client base depends on the reputation of the company itself. It is clear that long-term profit is much more profitable than short-term gains from working against a client trader, therefore Forex companies (even remaining "Forex kitchens") stop drawing quotes, stop outs, etc.

From this point on, the Forex broker begins to hedge traders' transactions.

2. Now the Forex company is already withdrawing trades from traders to the interbank market. If traders' total transactions exceed more than, for example, $ 5 million, they are transferred to the Interbank Forex. The broker no longer works against the trader, since the trader's win is no longer paid from the pocket of the DC.

3. Over time, the Forex broker can withdraw each order of a trader to the interbank market. This technology is accompanied by some inconvenience for the trader - the minimum size of the transaction and a large initial deposit. It takes 1-2 minutes of time to execute deals, not a couple of seconds.

Forex companies in most cases use the second technology.

Broker clients do not have a conflict of interest, since the broker earns a commission regardless of the client’s trading results. But the clients of "Forex Kitchen" have a direct conflict of interest, since the profit of a trader is a loss of "Forex Kitchen" and vice versa.

This is very important for understanding the logic of Forex company earnings.

Forex Reviews

As it was already possible to guess, a lot of negative reviews about Forex were left by “Forex Kitchen”. Also, the factor that a very small part of traders get out in plus also makes a big impact on Forex reviews. That is why reviews of Forex are quite contradictory.

Up to this point we have only talked about traders, but I used to mention that you can also invest in Forex. In Forex, this is called investing in a PAMM account.

For more details on how to start investing in PAMM accounts, you can read in this article.

Moreover, to invest in Forex you do not need to have special knowledge, but the investor’s profit is much less than a trader. The whole point is to invest in just those 10% of traders who actually earn money on Forex. My blog is dedicated to this topic.

Forex reviews from investors

Investors are much easier. There is simply no need to post more reviews from investors, as in my blog you can find reviews and reviews of both the most popular and reliable, as well as the most "kitchen" PAMM sites based on my personal investment experience.

How can I make money on Forex?

The Forex market is open to everyone, but there are very few people who have made their earnings on Forex through TRADE, as a percentage. Trading on Forex is very difficult and most traders are draining their deposit - this is a fact!

It is much easier to invest in professional traders (managers) through a PAMM account, this is also done by the traders themselves (they invest in their colleagues).

PAMM accounts are made quite simple and understandable for a person of any age and profession, so the choice of managing PAMM accounts should not be a big deal for you. If you still have difficulties in forming an investment PAMM portfolio, then you can use the service “Order investment portfolio”.

Before making a decision to start investing, I suggest that you read the risk warning.

Earnings on Forex more than real, if you approach wisely to this issue.

All successful investment!