I’m starting a Forex trading podcast called “Forex Q&A Podcast” where you can ask me any Forex related question you want, and I will answer it as soon as I can. I’m hoping it will end being the #1 place for Forex tips and advice. If you have one, you can ask it here.
Please read this first, however.
I thought I would start with revealing the most common 4 questions I already get all the time, once people realize what I do. This way, if one of them was your question, it will already be answered and you can come up with another if you like.
Keep in mind, these are questions from people who usually have no idea what FX Trading even is, because I live in America, and the top form of investing by far in this country is stock trading.
So these questions may be a bit dopey and rudimentary to your average Forex trader, but bear with me here, it is entertaining to hear some of the things these people ask.
And by the way, when I tell them I trade foreign currencies, most of them think my job means I drive to the airport, go to the currencies exchange, pay their ridiculous premiums, and drive home.
They really think this. But I can’t disparage them for thinking it, Forex trading really isn’t big in America.
Most questions from actual traders are very good, but these are from random people, not traders. So I want you to know before moving forward — these were not very focused questions, and thus, people were usually very disappointed with my answers. But smart Forex traders will understand and get it. Find out which side you’re on.
I’ll go from the 4th most common question to the most common. The most common is worth the wait, don’t cheat and scroll down now. Stay with me.
4th Most Common Question I get:
“So where you you think (insert random currency) is gonna go?”
First off, this question is super vague, and if you send me a question, I hope you give me a little more to work with.
So let’s say they ask about the Euro. Do they want to know where I think it’s going this year? This week? Tomorrow? I don’t like vague Forex questions like this, but regardless of what time frame they were talking about, my answer is always the same.
A: I have no clue.
Now this isn’t a bad thing that I don’t know, I’d be a fraud if I pretended to, but people are really thrown off when I give that answer.
I then explain that I use 99% technical analysis to trade. I don’t say it like that, I say some variation of this:
“The great thing about Forex trading is that if you do it right, your charts always tell you where to go. So I wake up, look at my charts, and they’ll either tell me to enter a new trade, maintain a current trade, or do nothing. Then I walk away and enjoy the rest of my day. It’s pretty great.”
Long-term predictions are worthless. If you ever watch CNBC, Bloomberg, or any financial network, you already know this. They interview people all the time with an opinion on where things are going, an they’re right about half the time, which does not help you one bit.
When these “experts” are right, they get invited back and the host mentions their correct prediction. When they’re wrong, they still get invited back, and the host conveniently doesn’t bring it up.
It’s a sham. A total racket. And I will not be one of those people.
The 3rd most common Forex trading question I get is a variation of the same question, but with a little more thought behind it at least:
3rd Most Common Question I Get:
“Based on (insert world/political event), what do you think (insert currency) is going to do?”
I can get on board with this question a lot more. There’s a real cause-and-effect nature to it, so it did require some thought. And my answer?
A: I usually don’t know this either. But there are some easy things to know.
When Donald Trump was elected president, this was seen as good for the US economy, and in turn, bad for the price of the USD, since the two are often correlated that way. This was a slam-dunk for the most part.
Trump wanted exports to go way up, and a cheaper dollar was a big part of that. Just know that any time a conservative leader is elected, it’s generally seen as good for the economy. Not hard.
Now onto Grexit. Back in 2015, the European Union wanted Greece out. There were two very strong sides to this however.
One side said they needed Greece and their large economy, and European stocks would fall by 50% if they left (This was usually France panicking, surprised?). The other side said that Greece is the shitty, lazy, entitled family member of the EU, and getting rid of them and all of their ridiculous debt would be a long-term boon to the EU.
During all of this speculation, the Euro was a terrible currency to trade, and EURUSD traders got destroyed over and over again. Why?
Because for the most part, and read this twice — Forex fundamental analysis should be avoided as much as possible. More on this in another blog post.
All of the Grexit speculation was a feeding frenzy for the big banks (they are the ones who actually move the market up and down). No matter what news on Grexit came out during the week, the banks could interpret the news it however they wanted.
They did what they always do — found out which side the most money was on, and punished those traders by tripping their orders then taking price the other way.
So to sum up question 3, it all depends on the event. Trading with charts is always superior in every way than trading with news events, which are always wide open to interpretation — and never your interpretation.
On to the 2nd most common question. You may have seen this one coming, and may be even more surprised it’s not #1.
2nd Most Common Question I Get:
“Do you trade crypto?”
I know this is a place for Forex tips, but you knew this question was coming.
And once again, they hate my answer.
A: No I don’t.
Now they start thinking I’m an idiot, or they did until the price of cryptocurrencies corrected. But there’s a lesson in the reason why I don’t.
I don’t trade anything unless I have a very strong advantage there. Most of you don’t know I was a semi-pro sports bettor before my Forex trading took off. I didn’t have much of an advantage there, nobody does, and most of those who do have zero money-management, so it doesn’t matter.
But even though I live in Las Vegas, Nevada, I refuse to gamble because I will not put my money on anything I’m designed to lose.
I will say it again.
If I do not have a clear advantage in something, I do not put my money on it.
I only play games I know I can win. Why would I play anything else?
Thrills are great and all, but making money from Forex trading, to me, is the greatest thrill there is. So I do that.
I stopped sports betting by the way, because my advantage there was small, and over time, my advantage in Forex trading became much larger, so I quadrupled-down on that. It was a wise move.
Branching off of that question, I have no idea where crypto is going either. Even though a lot of old-money investors freaking nailed it when they said it was going to fall, I really think they got lucky.
Crypto is unique to any other financial instrument out there. You simply cannot compare it to anything else. So don’t.
And that is hopefully the last time I’ll ever have to talk about crypto. I’m good where I’m at. I wish those investors well, but most of them have no idea what they’re doing, and it’s a recipe for disaster.
***And no, I don’t trade binary options either. I have no advantage there either and don’t care to learn at this time.
Onto question #1. I really doubt this question applies to you, and I hope it doesn’t. But it’s a fun read anyway. At least I think so.
The Most Common Question I get asked as a Forex trader:
“I have some Iraqi Dinar. Do you think it will ever go up”
A: You got scammed. Try not to let it happen again.
Actually, one of two things happened to these people. Either they, or somebody they knew came back from the war and had a bunch of it, or they fell for the old Iraqi Dinar Scam. I’ll give the very short version of this.
Scammers would load up on dinar, and sell it to people on the pretense that after Saddam got murdered and democracy was being introduced to Iraq, everything there would be amazing, Iraq would flourish, and the price of the Dinar would skyrocket.
The pitch sounded so great, people never asked themselves these two questions:
- Why does this guy want to get rid of it so bad?
- What normally happens when you try to introduce democracy to a country that’s never had it before?
Let’s just say the answer to that second question is: There’s a learning curve. And I’m understating this about as much as humanly possible. Countries often fall the fuck apart when this happens, especially when those countries are 3rd-world Dictatorships/Theocracies. Iraq was no exception.
And Investopedia agrees with me, by the way, if you want to read more on this.
So feel free to go here and ask me any Forex trading question you’ve always wanted to know, and I’ll get back to you with an answer as soon as I can.
But please avoid these four questions. You can do better than this, I’m sure. 😉