Forex trading risks

The hubby is cautioning me against starting to trade before I’ve put in enough time learning the ropes. It’s not as if I could start to trade right now anyway. I admit I was tempted to open a real account today but common sense got the better of me. I was going to fund the account with my credit card but I thought better of it. I decided that I need to wait and try to come up with the money rather than put myself in debt to trade. Besides, my husband is right. I need to spend more time learning about forex trading. I’m definitely not ready to start trading with real money. It’s one thing to be making a profit while trading in practice mode. Once you put real money on the line the ballgame changes. I do think there’s such a thing as being too cautious when it comes to money though. I understand that when you’re poor you can’t take certain risks with your money, but I also think that sometimes the only way you get out of a cycle is to take a risk.

I will agree though that the time has to be right for taking risks. Right now I’m too new to forex trading. There’s plenty I don’t understand and when you don’t understand you’re always at a disadvantage. It’s always easier for people to make a fool out of you when you enter into a conversation without knowing enough about the subject being discussed. In addition to that forex trading comes with substantial risks according the the National Futures Association. That means that in addition to trading while not really knowing enough about foreign exchange, I would be at risk of losing what ever money I invest and even owing money because of leverage, which if my understanding of the term is correct allows a person to trade with more money than they actually invest. I’ve seen some places advertising 200:1 leverage. At that rate you are more likely to take greater risks which means you can suffer greater losses, not only losing what you invest but also being liable to the broker for the amounts lost over your actual investment.

For more on forex trading risks you should definitely read UNDERSTANDING THE RISKS OF TRADING IN THE RETAIL OFF-EXCHANGE FOREIGN CURRENCY MARKET