Warning against foreign currency trading

Marami na po akong nadidinig tungkol sa Forex trading. May nakausap na po ako na mga agents and traders coming from different investment houses. And their promises are huge income in dollars and fast ROI. For an investment of $5,000 or Php 230,000 pwede ka nang mag start as investor and pwede nang kumita in dollars. Non taxable ang profit.

My questions are: 1. Safe po ba na pumasok sa Forex trading? 2. Ano po ba ang mga risks na pwedeng mangyari? 3. Is it a stable business venture? 4. Bakit po sya non taxable ang profit? 5. Legal po ba na business ito? 6. Advisable po ba ang business na ito sa may mga small capital lang like Php 250,000?

This is a good example of the makings of a scam that promises big and fast profits. Forex trading is a highly risky and volatile business. This is best left to professional and institutional investors with large investible funds (generally in the millions and hundreds of millions). This is not for the small investor to indulge in. By its very nature, it is a trading game not investing in the true sense of the word. It is also impossible for any trader or broker engaged in forex trading to guarantee profits to an individual investor at any time. Nobody can really forecast currencies or any commodity trading. Maybe, you can guess the movements a few times but never consistently on the long term. You can make money a few times but could lose it and more over the long term. In addition, if you are just an investor and not the actual trader, you will have to trust the institution and its traders who trade for you. The pseudo ones actually choose who to give the profits to, usually the new investors, to further encourage them to bring in new clients. Definitely, if you enter currency trading, you will actually be gambling with your savings. So if any agent promises any profits, be assured that it is a scam. These agents are there only to solicit new clients and earn their commissions. They are not there to serve your interest. The $5,000 or Php 250,000 is a lot of money and if it is all you have, you should put it in a business or investment that you really understand. More likely, the agent is not really explaining to you that your $5,000 is not your total exposure. Currency trading takes a lot of time to learn and experience to be able to be reasonably conversant with it. To do actual trading yourself will require more extensive studies and licensing as well. Currency trading can be legal. It depends on whether the company has the necessary license from the Bangko Sentral and the SEC. You should ask them why the profit is non-taxable. In fact, you should quiz them carefully before even considering them. There are many other options if you want to invest. Don't be lured by quick returns and fast bucks. Remember my advice. “The best way to get rich quick is to get rich slow. In investing, slow is fast.”