Is Forex Trading Profitable?
So, is forex trading profitable? People looking for opportunities to make money online often end up in the portals of online forex brokers and immediately they get mesmerized by the prospects of making real money fast trading foreign currencies. More often than not, they start creating illusions of making it big as currency traders the way George Soros and Warren Buffet did. If these two people were able to do it, why can’t they? This cavalier attitude seems to be the driving force that made people try their hands at foreign currency trading.
How many of them made real money in trading foreign currencies is something we may never be able to tell. It is only the trader and his broker who would really know and brokers are bound by the same code of secrecy practiced by banking institutions regarding their client’s trading account. How many of them lost money on forex? Well, that is easy to tell since ordinarily, those who tried and failed in foreign currencies start blaming everything and everyone else for their debacles except themselves. They create such a raucous everywhere that you’d easily notice them and their numbers you can count. And if you are to develop a conclusion on the question “Is forex trading profitable” from their numbers, you’d probably end up saying that forex trading is not profitable.
On the other hand, if you pose the same question “Is forex trading profitable” those who have made a pile trading currencies, you will be lucky to get a straight answer as these people will never blurt to the world how much money they made unless they want to court disaster for themselves and have the IRS people knocking on their doors. The actual number of these people who made real money in forex trading is something quite difficult for anyone to determine but definitely there are a number of small George Soros and Warren Buffets out there who just prefer to remain incognito.
But if you are really dead serious to find out if forex trading is really profitable, there are some numbers you can squeeze out from the Commodity Futures Trading Commission or CFTC, the government authority that regulates online retail forex brokers in the country. By virtue of the Dood-Frank Legislation which took effect in October, 2010, online retail forex brokers who wish to peddle their services on American soil must be registered with the CFTC and must comply with certain reporting requirements. One of these required reporting requirements is an end of quarter report on the percentage of profitability and/or non-profitability of client trades conducted under the wings of each online forex broker.
The good news is based on the latest report, U.S. based forex brokers reported an average of 28.5% profitability with some brokers reporting profitability results as high as 50%. These are hard facts which squarely resolve any doubt about the possibility of making money in forex trading.
But hold your horses first before you make a bee line to an online forex broker portal. These numbers can fluctuate. The numbers can go up or down the way rates of exchange fluctuate in the forex market. In the first place, making money on forex trading is relative to a number of factors which every trader needs to understand and assimilate before he can be part of the profitable statistics. Besides, he needs to understand that a sterling performance in the past as reported by any broker is not a guarantee that you will always be able to replicate the feat in the future.
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