The ruling bodies for the foreign currency off-exchange markets are collectively the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC) in the USA and in the UK the Financial Services Authority (FSA). They do not like to see statements like the one on this headline title.

I think that it would be fair to say that the NFA, CFTC, and FSA are trying to make sure that people are not encouraged to grab every penny that they can get their hands on and dive headlong into the forex market, possibly putting themselves and their family into financial crisis. What they want is for the foreign exchange market to be perceived in a balanced way, and for people to understand the risks that are involved in trading within it.

OK, that said let us take a balanced look at the forex market.

Most retail traders enter trades using very high leverage - often 100:1 and sometimes more. This means that quite small movements in the price differentials of currency pairings will create large gains or losses in direct proportion to the amount of leverage employed, and because of this, every trader should be aware that it is highly possible to sustain big losses as well as make big gains.

Of all of the participants entering the forex market, it is widely predicted that 95% will sustain at least a partial loss of their investment and only 5% will make a profit.

But is it possible to make $27,000 in 4 minutes flat? Actually the answer is YES! But by the same token it is also possible to lose $27,000 in 4 minutes flat too.

Are the governing bodies right to be so touchy about attention grabbing headlines that seem to infer the possibility of great gains? In my opinion they are.

The problem is an old one. The few ruthless operators that lure in the unwary for the sole purpose of separating them from their cash casts a shadow over both the good and bad.

The rooting out of these unscrupulous entities is to be commended, but on the other hand, is it fair and balanced to be forced to play down the good side of this great industry?

I do not think that it is.

If you have funds that you wish to invest, and they are funds that if lost would not cause you financial hardship, then you may well wish to consider trading on the foreign exchange because it is one of the few places that it possible to turn a relatively modest investment into a considerable sum of money- but not without risk.

Trading on the foreign exchange is a risk business and as with any risk business one needs to have in place, a solid risk management system and a very reliable trading system. Even then a total loss of funds is still possible - as is the possibility of making a better than average return on your investment.

Summing up, I would not advise forex trading to the unwary investor, nor to anyone that is already having a hard time trying to make ends meet. But for anyone that has funds that they would like to invest in a high risk high reward environment then forex may just be the right place for you.

Finally, just to be clear, please read the following:-

IMPORTANT RISK DISCLOSURE

Off-exchange foreign currency trading on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with off-exchange foreign currency trading and seek advice from an independent financial advisor if you have any doubts.