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Your Online Guide » Forex & Trading » Guide to Forex

[T843]There Is No Free Lunch
by Steve Welker, Ste
Though many people will try to convince you otherwise FOREX is not risk free. The majority of the people trying to convince you that it is risk free have some FOREX product that they want you to buy. When you trade you are dealing with substantial amounts of money and there is always the possibility that a trade will go against you. You can minimize your risk, there are many trading tools available that will help you trade successfully and profitably while minimizing your losses.

A few years ago the FOREX market abounded with scams, currently the industry has cleaned up significantly but there is still a risk of being scammed. You will need to use some common sense and exercise some caution when you sign up with a broker. Take your time and be sure to investigate a broker before you sign up with them. A reputable broker will be associated with some sort of large financial institution such as an insurance company or a bank. They will also be registered with the proper government agencies. Here in the US they will be with the Commodities Futures Trading Commission or they may be a member of the National Futures Association.

Even once you find a reputable dealer to work with there are still some risks involved in the FOREX exchange. All trades are susceptible to sudden rate changes, radical political events and market changes.

Exchange Rate Risks: This is the fluctuation of currency prices during the time of the trade. Prices can fall suddenly which can lead to unexpected losses, stop loss orders can be used to help mitigate this risk. Stop loss orders are used to close a trade if the currency passes below a set price level. By using stop loss orders in conjunction with limit orders you can greatly automate the process of FOREX trading. Limit orders are used to open a trade when it falls to a certain price or close it when it rises to a specified price or profit level.

Interest Rate Risk: This can result from differences in the interest rates in the two countries involved in the currency trade. This can cause differences in the expected profit or loss level of a trade.

Credit Risk: This is possibility that one of the parties will not honor their debt when the trade is closed. This is usually only an issue when a financial institution declares bankruptcy. You can greatly reduce this risk by only dealing with regulated exchanges that monitor the credit worthiness of the members.

Country Risk: This refers to when the government in a country becomes involved in the currency exchange by limiting the availability of the currency in the market. This is a greater risk when involved with the more exotic currency than if you stick to the major currencies that allow their currency to be freely traded.

This outlines some of the most common risks in currency trading. All of these risks can be reduced to manageable levels even though they cannot be completely eliminated.

That is extremely valuable information to keep in mind when you're surfing the Net looking for a home-based business. Beware the ?nothing (down) for something? SCAMS! They go against ALL the generally accepted rules of business and commerce.

Business and commerce started eons ago. At first, it took the form of bartering?exchanging goods for goods. I'll trade my fish for 3 pieces of your firewood. Then ?money? was invented in the form of seashells, beads, or pieces of metal. Aardvaak pays you 3 seashells for your fish, and you go across the village and pay Oodwarg 2 seashells for some firewood, which leaves you one seashell to buy bread from Mharyang on the way home.

It's still how we do business today?except we now use coins & bills, credit cards, debit cards, money orders, bank drafts, bank wires, checks, email transfers, or PayPal. But it's ALWAYS in exchange for something, be it goods or services. If not, the police is called in to investigate'or at least they should be.

I'm a business person. I have products for sale, and I have a business opportunity. To get either one, you'll have to pay money. It's a value-for-value proposition; your money for my product and / or opportunity. Fair and square. And on top of that, if you want to succeed with my business opportunity, you'll have to do some work. Again, value (your sweat & elbow grease) for value (a substantial residual income).

?The concept of value-for-value is the foundation for all sound, harmonious human relationships. Value-for-value is another way of saying ?win-win?. The surest way to succeed in any endeavor is to make certain that ALL parties to a transaction come out ahead.?
Robert J. Ringer, philosopher and bestselling author

No free lunch. Everything has a price. As it should be. Warren Buffet once said, ?"Price is what you pay. Value is what you get.? Or as I like to say, ?You always get what you pay for; you pay nothing, you'll get nothing.?

You're probably wondering why on Earth I'm spending so much time expanding on something so obvious. Because for some unexplainable reason, many otherwise intelligent people (who would never consider walking out the door of the liquor store with a case of wine they did not pay for?unless they're looking for a way to spend a night in jail) act like idiots when they're on the Net searching for a home-based business opportunity.

As if all of a sudden, because they're navigating the virtual world, all the laws of commerce?particularly the practice of value-for-value'no longer apply. And they'll get sucked in the most ludicrous scams. Like ?free business opportunity?, or ?no money down turnkey homebased business? or ?you do no work, we do it all for you.? On that last one, if that was true, if they indeed do ALL the work, why would they not keep ALL the profits?

Come on people, put your thinking cap back on. Let's be real; a business costs money?even in the ?virtual? world. It costs money to start and to grow. And it takes some work too. Those people should stop fooling themselves and waste their time responding to those idiotic ads that pollute the Internet. If they believe crap like ?Turn $35 into $10,000 a month, for life!?, the next thing the scammers will sell them is some ocean-front property in Arizona.

You know what song is playing in the scammers? head while he's processing some sucker's credit card? The words are from a very popular song of the mid-eighties; ?The lights are on, but you're not home, your mind is not your own?? They'll probably sing that too as they're walking and laughing all the way to the bank!

Enough negative stuff already. Let's close this article with valuable words of wisdom from three very successful philosophers-businesspeople;

?Creating legitimate value is the straightest line between where you are now and where you want to be. It is a major component of getting what you want in life. It doesn't matter how fast or how hard you work if your efforts don't create value for others. And creating value stems from passion; passion stems from belief in what you're doing; belief in what you're doing stems from working at something you not only are good at, but enjoy. When you get all these factors going in the right direction, you have no trouble being motivated to do whatever it takes to succeed. There is nothing quite so exhilarating as working yourself to the point of exhaustion for months, or even years, then being handsomely rewarded for your efforts in the marketplace. Every human being should treat himself to this drug-free high at least once in his lifetime.? Robert J. Ringer

Zig Ziglar is famous for saying, ?You gotta put something in FIRST if you want to get something out?. He usually makes that statement while operating on stage an old-fashion water pump.

?Money is a measure of the value that people place on goods and services. The amount of money you earn in a competitive market is the measure of value that others place on your contribution. So, to increase the amount of money you are getting out, you must increase the value of the work that you are putting in.? Brian Tracy, in The Laws of Money

Article Source : Pg. 8

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Both Steve Welker & Daniel St-jean are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Steve Welker has sinced written about articles on various topics from Forex Guide, Family Concerns and Acne Treatment. Ready to .Learn our completely free.. Steve Welker's top article generates over 201000 views. to your Favourites.

Daniel St-jean has sinced written about articles on various topics from Advertising Guide, Personal Finance and Networking. Daniel St-Jean is a Certified Wealth Creation Consultant. As such, he runs a very successful direct-sales home-based business. Find out about it at http://www.MoreMoneyMoreTimeForLife.biz/Articles-Posts.html where you can read many more of his articles. H. Daniel St-jean's top article generates over 12100 views. to your Favourites.
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