Forex - just another Get-Rich-Quick scheme?

Is forex all it’s cracked up to be? For the more conservative amongst us, the growth of web sites promising overnight riches from forex trading make us remember that get rich quick schemes, notoriously do not work.

Most of us would run a mile if we were offered such a scheme. And it’s true, people do get their fingers burnt as they try to get rich quick. We’ve all heard the saying, ‘there’s no such thing as a free lunch’ - and generally speaking it’s true. Forex is not a free lunch and it definitely is not a get rich quick scheme. But for the steady, non-gambler who is prepared to be disciplined, patient and sensible, Forex can be a complete life changing, safe and profitable business.

It’s ALL about compounding a tiny amount regularly and with discipline.

Let’s compare ‘Return On Investment’ (ROI) from forex, with ROI from a bank. We’ll assume a bank deposit account with $5000 in it attracts interest at 4% per year. At the end of a year, the total ROI would be $200.

Now let’s compare that with a simple minimum target of just 5 pips a week at forex - trading only 5% of a capital of $5000. Using a simple equation to determine a pip value of $12 a pip. 5 pips a week would give us a ROI of 3.3% per MONTH.

Untouched for a year, the compounding of a growing capital sum would give an annual ROI of a staggering 88%. Compare $200 with $4,400 and it’s a no-brainer. No wonder more and more ordinary people are turning to Forex to change their financial circumstances.

5 pips a week really is low figure. It includes negative trades, holidays and off days and is a truly achievable target. Unlike any other markets, forex is 100% controllable by the individual. The ONLY prerequisite for safe trading is discipline and 100% application of some simple rules.

Most people do not understand the power of compounding in Forex. Here are actual figures for monthly ROI on the same $5000 - but instead of 5 pips a week, we’ll double the pips to 10 pips a week. Still an incredibly low target by anyone’s standards.

This is an example only to explain the power of compounding. The 10 pips a week projection does not take into account holidays and off days. It is an average, and includes negatives. It is not a guarantee of earnings. The column on the right is actual profit on your original investment(ROI) which remains intact.
Once Again Please Note: These figures are net, average, which means they include losses.

Month 1 . . . . . 11.08%
Month 2 . . . . . 22.32%
Month 3 . . . . . 36.00%
Month 4 . . . . . 51.36%
Month 5 . . . . . 67.64%
Month 6 . . . . . 86.64%
Month 7 . . . . . 108.8%
Month 8 . . . . . 131.44%
Month 9 . . . . . 157.80%
Month 10 . . . . 187.28%
Month 11 . . . . 218.56%
Month 12 . . . . 256.84%

Forex is definitely not a get rich quick scheme, but compounding small amounts regularly, surely can pay-off, big time.

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