Forex Education and the Retail Forex Trader; Can the Small Guy Win?

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September 29, 2011 3:57 AM EST

Few markets can be as rewarding and punishing to the individual investor than the Global Forex trading marketplace.  "Forex" is short for Foreign Exchange and it refers to trading world currencies against one another.  The global marketplace for Forex is estimated to be approximately $5 Trillion per day according to the Bank for International Settlements (BIS), which is more than 50 times the size of the entire US stock market.  Can forex education help retail investors take advantage of opportunities in this market?

Large banks, trading institutions and hedge funds are active participants in this huge global marketplace and employ millions, if not billions of dollars in research and technology systems to trade this market.

Forex trading in the spot market is primarily conducted Over-the-Counter, which means that it is not traded on an exchange.  It trades 24-hours a day, five and a half days a week.  Forex prices are highly volatile and are influenced by many factors which can be very complex and at times counterintuitive.  On top of that, traders have up to 50:1 leverage, so even small moves can have a profound impact on trader's positions.

So can the individual trader participate successfully in this marketplace?  The large brokerage firms offering currency trading accounts report that the majority of their traders lose in the Forex markets.  Further, they report that the more active a trader is, meaning those traders who make more trades, tend to be among the highest percentage of losers.

This has given rise to an industry within and industry, specifically forex education, or forex trading training.  But can training compete with the sheer power and size of the large global institutions?  According to Forex market and trading author, Jay Norris "traders don't have to compete with the big companies."  Norris says, "Traders need a plan, discipline and patience...but of course there are no guarantees.  This is a risky marketplace."   

Jay Norris has authored two books on Forex trading, Mastering the Currency Market: Forex Strategies for High and Low Volatility Markets and Mastering Trade Selection and Management: Advanced Strategies for Long-Term Profitability.

Mr. Norris feels that traders can benefit from studying technical analysis. Technical analysis is the study of charts and price behavior to conditionally forecast potential market opportunities.  Norris also offers traders free access to what he calls a Live Market Exercise.  The Live Market Exercise is offered free as a trial for two weeks through New York-based Forex Broker, IBTRADE at their Web site at http://www.ibtrade.com/sub_gs_webinar.htm.  Norris does charge for his educational services after the free trial period and IBTRADE allows their customers free access to the Live Market Exercise.

Forex education services are also offered through the large brokerages at varies price-points and many new companies have emerged to take advantage of the need for training in this huge global marketplace. 

Forex research by ForexTV.com

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