Forex and Futures: Do they have a future for you?

By | April 6, 2007

I’ve been an active investor since 1998, but my track record hasn’t been good. I will in the next few months provide the juicy details of how I lost dosh on the stocks. I already wrote about the NAT story. Well, I’ve got a few others to share. Right now, though, my focus has been on generating money for purchasing dividend stocks, including those on the DJIA index. I particularly like stocks whose dividends increase over time. That’s the best way I think to play the dividend game.

forex

Living overseas has also introduced to me the concept of foreign exchange. I’ve noted that quite a few Japanese expatriate workers here play the “carry trade”, borrowing in low-interest Yen, then converting to dollars, pounds or similar currencies, and investing in bonds, cds, or whatnot at much higher rates. Of course, this isn’t the best way if you’re playing with needed cash as exchange rates can be volatile and wipe out your gains.

Still others use forex trading as a way to earn money, by arbitraging the differences in exchange rates or by buying and selling within hours or days, as the currency pairs that they purchase move up or down. In forex trading, of course, one of the ways to make a killing is to leverage your cash, in some cases upto 400x the original amount. Of course, with leverage like that, small moves in currency prices can result in big losses or gains. So the risk factors are quite high. For example, if you had $1000, with such large leverage of a 100x, you could trade upto $100,000, and a 1% change in your favor would double your money, while a 1% change the other way would wipe out your capital.forex tools

Futures trading also provides a good option for investors looking for insurance or for greater returns than traditional stock investing. For futures trading, you are purchasing the obligation to buy or sell at some point in the future. Since most of us would be speculators, the aim is to ‘buy on paper’ rather than take delivery of the commodity that is being traded. Such commodities include oil, gold, currency, but also a wide variety of other products and even financial instruments can be traded.

The screenshot on the right here highlights the platforms that Global Futures operates for traders in either futures or forex. For those of you who are interested you’ll notice that there are a number of demo or simulated trading accounts that can give you an idea of how the whole thing works. So if you would like to try out any of these or you have any questions, please email [email protected] if they have any questions about how they can get started with as little as $250.

As in all investing, there is a risk of losses as well as gains, so you need to be aware that both futures and forex can and do create opportunities for both tremendous gains and losses. Do not invest money in futures, options or forex that you cannot afford. And do your due diligence on any service, product or investment that you make.
There is risk of loss trading Futures, options and forex online.

Sponsored by GlobalFutures.com.

Author: InvestorBlogger

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