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Question: Capability of forex trader, ?

(Posted by: asia_purwadi on 2008-11-09 00:34:40)

What should I do, if let's say I have 50.000 usd then I want to invest this money into forex trading. someone asked me to believe him for managing my money but of course I don't know the capability of that trader. may be someone can give advice or something to do for knowing his skill.

Posted by: tsuhuang on 2008-11-09, 01:43:08

Ask to review his trading report card (his previous trading history and transactions). Of course you need to know how to interprete that as well.. and remember, its not about how much % success rate that trader has.. its also about how much one wins when you are correct and how much you lose when you're wrong that really matters. You can win consecutively 9 times a dollar per trade, and lose 10 dollars on your tenth trade. Which will give you a 90% success trading rate, and a net loss. (just making a point)

Posted by: Sisyphus on 2008-11-09, 04:41:19

Unless there's some major currency change you're sure is going to happen, I'd start with (1) a virtual forex trading account which uses real figures but isn't based on real money, (2) start trading as simple money exchanges between currencies. Currencies don't fluctuate as much as stocks, as a 30% swing is considered extreme whereas stocks can fluctuate 90% or more. (3) when you're comfortable, consider trading using leverage. With leverage you amplify your profits or losses, so leverage of 1:20 would mean you put in $50,000 and if it goes up 5% you'll get 50,000x20x5%= $50,000 profit.

Posted by: JohnGalt on 2008-11-09, 05:51:37

Run away. With forex leverage so high, any decent trader can make a fortune using his own money. Why would he want yours, unless he already lost his?