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  1. #1
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    Is it safe to trade Forex for Living ?

    Hi..
    Need your opinion, guys..

    Nowadays NFA has several statements that seems to disadvantage the retail traders. First no Hedging policy and then FIFO policy.
    I just wonder.. Since most of us including me have goal to trade forex for living, is it safe and is it still allowed to trade forex with relatively small of money. (below USD 10,000).

    Because my fear, if someday only big dogs and institutional are allowed to trade forex, so how about us the retail traders who already leave daily job and just depend our income on Forex ?

    Do you have any comments or opinion about this ?

    Regards..

  2. #2
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    Re: Is it safe to trade Forex for Living ?

    Quote Originally Posted by adrian1974
    Because my fear, if someday only big dogs and institutional are allowed to trade forex, so how about us the retail traders who already leave daily job and just depend our income on Forex ?
    I think it won't happen. But it would be a good idea to invest time and efforts not only in forex, just in case :-)

  3. #3
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    Re: Is it safe to trade Forex for Living ?

    I can't see retail brokers disappearing any time soon.

    The NFA rules will probably clear out some of the smaller (and hence more risky) US brokers, however there are plenty in Europe and other parts of the world where the NFA has no say in what they do. If you're switching broker from the US to a broker in another country then you need to do some due dilligence to make sure that they're large enough not to go bust overnight. Normal low capital retail accounts are still available all over the place. Lots of folks are switching from Alpari US to Alpari UK and from FXCM US to FXCM UK to avoid the annoying NFA restrictions.

    I'm not sure how much you need to earn to live off per year, though a making a living from a trading pot of less than $10,000 would be impossible for a lot of folks.

    Even if your worst nightmare happened and all retail brokers disappeared overnight, then there are other options for manual trading such as spread betting (common in the UK, though I'm not sure about elsewhere) or trading forex futures direct on the CME via a futures broker.

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    Re: Is it safe to trade Forex for Living ?

    I believe that Forex is the future- I had left the world of stocks because of the restrictions in the US markets. There are cheap penny stocks too, but they tend to stick to one's hand when trying to sell them, so currency seems to make the most sense to trade, especially if you wish to trade short as well as long. Stay out of the NFA member brokers though, they are the ones with the new restrictions...I have transferred all investment capital out of the US, which really is a waste, but that's the way they seem to want it. Good luck to you!

  5. #5
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    Re: Is it safe to trade Forex for Living ?

    Quote Originally Posted by soundfx
    I can't see retail brokers disappearing any time soon.

    The NFA rules will probably clear out some of the smaller (and hence more risky) US brokers, however there are plenty in Europe and other parts of the world where the NFA has no say in what they do. If you're switching broker from the US to a broker in another country then you need to do some due dilligence to make sure that they're large enough not to go bust overnight. Normal low capital retail accounts are still available all over the place. Lots of folks are switching from Alpari US to Alpari UK and from FXCM US to FXCM UK to avoid the annoying NFA restrictions.

    I'm not sure how much you need to earn to live off per year, though a making a living from a trading pot of less than $10,000 would be impossible for a lot of folks.

    Even if your worst nightmare happened and all retail brokers disappeared overnight, then there are other options for manual trading such as spread betting (common in the UK, though I'm not sure about elsewhere) or trading forex futures direct on the CME via a futures broker.
    Great response.
    Thanks a lot Soundfx..

    In Indonesia we can trade for living just only 10 pips a day in standard lot. Why ?
    Suppose we gain only 10 pips /day, that means we earn USD 100. Just averaging all profit in 25 days (profit = Win - losses) and the result we just get only 100 pips (means USD 1000).
    Then at the end of the month we are making Withdraw (minus USD 20 TT charge) so the result are USD 980. And in Indonesia USD 980 equal IDR 9,898,000 (according current rate at this morning)
    That's the sallary of Middle Manager, and we can make living on that.

    And if we have enough confident to grow our skill and psychology and offcourse MM, we can get more than 10 pips.

    That's why I think It's possible to trade for living in Indonesia.
    What I fear about regulation is only if they change the rules so it's difficult for us the retail trader to trade with small money.

    Yes maybe stock is the alternate, but huge money needed.
    By the way what is Spread Betting? I just hear that.

    Thanks all..

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    Re: Is it safe to trade Forex for Living ?

    Quote Originally Posted by gpcode
    I believe that Forex is the future- I had left the world of stocks because of the restrictions in the US markets. There are cheap penny stocks too, but they tend to stick to one's hand when trying to sell them, so currency seems to make the most sense to trade, especially if you wish to trade short as well as long. Stay out of the NFA member brokers though, they are the ones with the new restrictions...I have transferred all investment capital out of the US, which really is a waste, but that's the way they seem to want it. Good luck to you!
    Hi Gpcode,
    Interesting one..

    Suppose we move to European based brokers, do we have to change our capital to EURO ? Because it can be a disadvantage when our rate weaker than EUR.
    And is there any "NFA - like" in European country ?

    Thanks..

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    Re: Is it safe to trade Forex for Living ?

    Dear all...

    Please narrow our discussion to NFA statement or Trading Regulation.
    We are not talking about system, Money Management, but more intense in trading regulation, specially in Forex retail trading.

    Because nowadays, NFA has released their new disadvantages rules to their member. And ironically, we choose broker who are the member of NFA. Because we think it will be saver to put our capital to them.

    But thanks anyway for all comments.

  8. #8
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    Re: Is it safe to trade Forex for Living ?

    Adrian1974,

    That's great if you can earn a living from less than a $10,000 pot - life is certainly different in Indonesia !

    Spread betting is popular in the UK because it's curiously classed as gambling and hence not relevant for capital gains tax. I've used it before for spread betting in Stocks, Index moves and Currencies.

    I use IgIndex for spread betting, though there are various other companies. It's very similar to Forex trading, though instead of actually buying/selling currency in the market using leverage from a broker, you're betting on the the move of the currency pair. Hence you don't buy lots of a currency pair, you place a Long or Short "bet" for $1 a pip or $10 a pip or whatever. You can close your trade at any time and can adjust targets and stops just the same as when FX trading.

    You can use all the normal ordering facilities such as limit/stop orders etc., however I don't know of any spread betting companies which use MT4, so you have to use their own charting facilities (which can be pretty good though there's not much scope for automated trading).

    The spreads for spread betting companies used to be a bit wider than some FX brokers, which has made them unattractive in the past, however these have been recently improving significantly for majors such as EUR/USD and GBP/USD. These are 1 and 2 pips respectively at IgIndex in the main session for the UK and US.

  9. #9
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    Re: Is it safe to trade Forex for Living ?

    Quote Originally Posted by adrian1974
    Hi..
    Need your opinion, guys...Because my fear, if someday only big dogs and institutional are allowed to trade forex, so how about us the retail traders who already leave daily job and just depend our income on Forex ?

    Do you have any comments or opinion about this ?

    Regards..
    Hi Adrian1974,

    It depends on how you want to look at it. From a standpoint of; is our money safe in our broker's hands? it all depends on the broker and the circumstances. No matter how many regulations you have, no broker is totally safe (remember REFCO?) but these new NFA minimum requirements for funds of 20 M$ will certainly weave out the small (and sometime unreliable) brokers. Is this really good? I'm not sure because often those "big" brokers are the worst offenders. FXCM for instance, as been penalized many times by the NFA for all sorts of reasons.

    If youíre looking at it from the perspective of safety for traders long term survival, then no, IMHO itís unsafe. Actually, trading in general, and particularly FX trading, is extremely unsafe to do, and this in almost all areas; It's dangerous for our financial health because it's so easy to loose all our money through greed, fears, etc (>90% of traders fail), itís dangerous for our physical health (trading can put immense stress on our bodies) and itís even dangerous for our mental health (traders can become the equivalent of pathological gamblers)

    Having said that, it can also be immensely rewarding if we can overcome these obstacles! BUT still, if one of my friends would ask me advice on whether he/she should quit their day job to start trading I would definitely answer: Are you nuts??? Learn trading a few years, make sure you are profitable, and then maybe, just maybe, quit your regular job to trade full time. BTW, I doubt very much that big dogs/institutions and even governments would ban trading for small investors like us because they have way too much to loose by stopping us. They created the retail FX market because it's another way for them to make money from us. A kind of tax on the ďhopefulsĒ

  10. #10
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    Re: Is it safe to trade Forex for Living ?

    Sincerely speaking your fear is justifiable. I dont know what the regulators are after. I myself have started to have a rethink. Pls let us spk up on this issue.

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