Example of disclaimers on nearly all online brokers.
“CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. *72.29% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money”.
Scary facts, but why bury our heads in the sand?
I was in two minds to write the above title considering I introduce beginners to the market. However, tens of thousands trade online every day and will continue to do so and more and more will try it.
The ethos of earnfx.org is to be transparent to individuals who are considering speculating the markets.
Let us not get too scared, some traders make very good returns and more importantly enjoy the challenge.
Why do people trade.
Firstly, lets understand that trading is not investing, trading with *leverage offers higher returns than traditional investments. Forex/CFD trading involves identifying market trends and then quickly buying or selling the underlying asset to make profits.
Investing, on the other hand, as an example, is based on buying stocks of a company after carefully analysing the business. Holding over a longer period. In some cases, decades.
Since the banking crisis in 2008, returns on safe low risk investments such as Bonds have literally gone to nothing, look at interest rates etc.
This is one reason trading online is so popular, offering higher returns over a shorter period.
The higher the potential return the higher the risk, simple. If anyone offers you an investment with high returns and low risk, they are trying it on. If it sounds too good to be true, it is.
Another reason we trade online is that Forex/CFD’s trading allows you to easily gain exposure to markets around the world with little capital. You do not need to be Donald Trump to enter.
Trading in the stock market has become less time consuming these days as you can trade all by yourself without the assistance of a broker by means of online trading. Just need the internet.
One of the clearest advantages of online trading is the reduction in transaction costs and high fees associated with traditional brick-and-mortar brokerage firms.
With online trading, you can execute a trade almost immediately. You can act quick if you access a movement.
Finally, many of today’s regulated and reputable online trading brokerages offer clients an array of tools providing valuable information and helping optimise trades and returns.
To conclude, online trading is becoming more and more popular and the best brokers are cleaning up their acts to retain their client’s long term. Higher risk to reward but in my opinion easier to get a return than betting on the Grand National.
Trade What’s Happening… Not What You Think Is Gonna Happen.” – Doug Gregory
*this is an example not industry average.