Is currency trading legal?
A guy who used to work with me quit his job & is living comfortably from making his $$$ through currency trading. He does next to nothing & claims to make good $$$. Could this be true? Is it even legal or he is just yanking my chain?
Public Comments
- It's legal and there is, indeed, a lot of money to be made trading currencies. But you had better know what you're doing because the losses can be fast and devastating.
- Its completely legal, but incredibly risky as well. Currency can be bought or sold just like stocks and bonds. For instance, a US dollar may buy you .5 GB Pounds today, but .4 tomorrow. If you use US currency to buy foreign currency when its moving in the right direction, and then sell while the swing is in your favor, this can absolutely be a profitable endeavor. However, its extremely risky even for someone who knows what they're doing, so I would absolutely not encourage this strategy to day-traders.
- Of course. The currency market is the largest market in the world. In fact the currency market trades about $3 TRILLION DOLLARS A DAY! It is highly speculative. You are trading against major world governments, world banks, and billion-dollar institutions. If a government decides to raise or lower interest rates that will have a major impact on their currency. Lower rates: Devalues the currency. Higher rates: Generally increases value, it gets complicated however. People who are not seasoned experts usually get their head handed to them. Your friend, if he is new at this, is lucky right now, but in time it will prob catch up to him. http://en.wikipedia.org/wiki/Foreign_exchange_market
- Certainly it is legal. Banks and other financial institutions make millions every day from trading currencies against each other, or borrowing Japanese Yen at very low interest and buying Euros with them if the Euro is appreciating against the Yen for example. There is even a foreign exchange market (Forex) where you can buy and sell from your PC if you are set up for it. Some individuals manage to make a living this way. Others lose their shirts because of bad decisions...
- yes it is legal. But I have seen the best fallen on currency trading. It may not be suitable for everyone. He may not be yanking your chain. Give it some time, oh, a year or 2 and see how he is doing. It might very well be his calling and finally found something he is good at. Or he could very well just be lucky. Only time will tell.
- well yes it's legal. there's plenty of companies in the US that offer currency trading and they are licensed and registered with the US government. As far as claiming to make good money doing it, you should be suspicious. Perhaps he's gotten lucky for a couple weeks after he quit his job, but the real test is to see if he can keep it going for the next year. Since basically 95% of traders fail, the odds are against him.
- you bet it is.
