So, is online currency trading profitable? People looking for an opportunity to make money form online currency trading usually land on the portal of an online forex broker, and they are immediately captivated by the prospect of making money fast trading forex. Like George Soros and Warren Buffet, they often start creating the illusion of being as big as a forex trader. If these two can do it, why can’t they? This brave attitude seems to be the driving force behind people trying forex trading.
We may never know how many of them made money from Forex trading. Only the trader and his broker really understand that the same confidentiality rules also bind the broker that banking institutions impose on clients’ trading accounts.
How many of them lose money on online currency trading? Well, it’s easy to say because usually, those who have tried forex and failed start to blame everything, and everyone but themselves is also responsible for their failures.
They’re so boisterous all over the place that you can quickly notice them and the numbers you can count. And if you were to conclude the question “is Forex trading profitable” based on their numbers, you might end up saying Forex trading is not profitable.
On the other hand, if you ask the same question, “Is online currency trading profitable” to those currency traders who trade a lot, you will be lucky to get a straight answer because these people will never blurt it out to the world unless they make money.
They want to claim disaster for themselves and have IRS personnel knocking on the door. The actual number of these guys making money in forex is hard to pin down for anyone, but there are certainly some George Soros and Warren Buffets Jr. just trying to stay invisible.
However, if you’re really serious about wondering if forex trading is actually profitable, you can squeeze some numbers out of the Commodity Futures Trading Commission (CFTC), the country’s government agency that regulates online retail forex brokers. Under the Dood-Frank Act, which went into effect in March 2010, online retail forex brokers wishing to peddle their services within the United States must be registered with the CFTC and must comply with specific reporting requirements.
One of these required reporting requirements is quarter-end reporting of profit and/or non-profit percentages of client trades made with the support of each online forex broker.
The good news is that according to the latest report, online currency trading brokers in the U.S. are reporting an average yield of 28.5%, while some brokers have yielded results as high as 50%. These hard facts can directly address any doubts about the possibility of making money in forex trading.
But hold your horse before the bee column on the online forex broker portal. These numbers may fluctuate. These numbers can rise or fall in the way the exchange rate fluctuates in the foreign exchange market. First of all, making money in forex trading is related to many factors that every trader needs to know and absorb before it becomes a profitable statistic. Also, he needs to understand that the past excellence of any agent does not guarantee that you will always be able to replicate the feat in the future.
Better understand online currency trading
What is online currency trading? online currency trading is an umbrella term, and when you ask anyone for a clear explanation of what it means, he goes through a chain of reasons, not just explaining what it really means but confusing. Indeed, forex is a great topic to discuss, and many things come to mind just by mentioning this word.
However, when the word foreign exchange is mentioned, what really comes to mind is the speculative buying and selling of various currencies in the hope of profiting from changes in the exchange rate between the currencies.
This practice of currency exchange in online currency trading has been around since biblical times. The concept of helping others to change fees or commissions in exchange for money has been mentioned many times in the Bible, especially during festivals in Gentile palaces, where they set up stalls and cater to other tourists not only for local festivals but also from local Land where merchants buy goods.
From ancient biblical times to the 19th-century since the 20th century, it has become a currency exchange family matters, some families gradually developed into respected and trusted money changers in our history and all over the world at different times The segment has a monopoly on foreign exchange transactions. An example is the Italian Medici family of the fifteenth century. The Medici family even opened banks in many places abroad to meet the foreign exchange needs of textile traders. They set the exchange rate arbitrarily and had a great deal of influence in determining the strength of each currency.
To solve this problem, countries such as the United Kingdom have taken measures to mint gold coins and use them as legal tender. By the 1920s, governments were beginning to adopt the bullion standard, when currency or fiat currency was pegged to gold held by central banks. These fiat currencies can be redeemed for gold-backed gold, which in turn creates more problems because the redemption of fiat currencies increases the outflow of gold reserves. The gold standard had to be abandoned as two world wars depleted the gold reserves of warring countries, many of which turned their currencies into legal tender.
After World War II, the United States was the only country with total gold reserves. The major superpowers met in 1946 and created the Bretton Woods Agreement, under which their currencies were pegged to the U.S. dollar, guaranteeing that the dollar would be readily convertible into gold.
However, as countries began to use large ransoms in U.S. dollars to replenish gold that had deteriorated due to dwindling gold supplies, the United States held dwindling gold reserves, eventually forcing the United States to abandon the gold standard and convert the dollar into fiat currency like other trading partners.
This essentially introduces a floating exchange rate system that determines the exchange rate between currencies and allows each currency to seek its level based on the level of supply and demand. Floating exchange rates inject volatility into the market, and natural market forces can determine the exchange rates we experience today in foreign exchange trading.