View the original post at http:\/\/blog.currensee.com\/2011\/02\/dont-hate-the-game-hate-the-player-even-in-forex\/<\/p>\n
By John Forman<\/strong><\/p>\n Last week I took on SmartMoney<\/a>. This week I take on the Prism Money personal finance blog, which is hosted by none other than Reuters, my own employer (it\u2019s a really big company, though, so no, I do not know the author and\/or editors responsible). The post in question is Forex folly: Why you shouldn\u2019t be trading currencies<\/a>.<\/span><\/p>\n Scam Everywhere!<\/strong> Now, this is not to say there aren\u2019t those who would seek to take advantage of the popularity of forex. That shouldn\u2019t be a reason to avoid a market, however. If that were the case you\u2019d have to rule out all the other markets too because there most definitely have been all kinds of bucket shops, boiler rooms<\/a>, and other scams involving stocks, commodities, and everything else.<\/p>\n As with any situation where you\u2019re putting your hard-earned money in someone else\u2019s hands, you definitely want to do your due diligence ahead of time to avoid the predators. The blog post author makes some excellent recommendations where looking for CFTC\/NFA registration, complaints, etc. are concerned. That is always a good idea. Be cautious about listening to posters on forum and chat sites, though. Very often the folks complaining about this or that company, group, etc. are looking to shift blame from their own failures.<\/p>\n Not for the average investor<\/strong> Is trading forex any different than trading any other market?<\/strong> Then there\u2019s the suggestion that the big players are in the game because it\u2019s volatile, turns quickly, and isn\u2019t predictable. If the large shops are in there looking to make money taking positions in currency exchange rates they clearly think there\u2019s at least some predictability to it all. They\u2019re not just flipping a coin.<\/p>\n =========<\/p>\n
\nThe wonderful part of this particular article is how the author basically paints the whole industry as a big scam. I\u2019ve addressed the forex scam<\/a> subject before, and no doubt it will come up again. Any time you have a situation where the majority of folks are bound to end up disappointed with their performance there are going to be claims of malfeasance.<\/p>\n
\nShifting to the question of whether forex is something folks should avoid or not from a more markets oriented point of view, this blog is another instance where trading and investing are being intermixed. Trading as most of us would define the term is in general terms not something most \u201cinvestors\u201d should look to do for any number of reasons. It doesn\u2019t matter whether you\u2019re talking about stocks, bonds, commodities, or currencies. Most investors just are not good candidates for trading. Please let\u2019s not conflate the two different approaches to the markets.<\/p>\n
\nGetting beyond the investing question, the blog author brings up some items which he thinks argue against forex trading. One is that the forex market is dominated by big banks and institutions. This is totally true. The big institutions are responsible for the vast majority of trading volume. As I recently wrote, however, the big players are not able to manipulate the forex market<\/a> to their liking.<\/p>\n