Debt is the big monkey on the back of many US households. The average US household owes $16k in credit card debt alone, without counting in auto, student loans and mortgages. Whilst some debts, like mortgages, can be seen as investments, credit card debt often has poor terms of service and hangs around like a bad stench.
Forex trading could be the answer. One of the more accessible markets and benefiting people with a sound trading strategy, gains are there to be made with consummate ease. However, what are the risks? And should you do it?
Establishing The Basics
Before you think about embarking on any type of debt recovery process, let alone forex, it’s important to know exactly where you stand. You should know exactly what your debt is, what your commitments are to repayment, and whether your financial records are in order. Many people in debt have irregular credit histories, the resolution of which can be assisted by companies such as those found on this website. Your credit score could be very important as many companies perform credit checks prior to trades, despite forex credit checks being controversial. The ‘last look’ system means that if you credit score isn’t correct you could lose out on good trades at the last call.
The Risks
Forex is a risky market as the volatile nature of currency can turn at the drop of the hat, such as the occurrence of international events and conflicts. It can also bring great rewards if you’re on your game and able to trade at will. For those who follow a strategy and are able to accept risks, you can stand to make up to 10% profit every month.
The best way to mitigate your risk is to rigorously follow the 1% rule – or 2%, if you prefer. This states that a trader should never risk more than 1% of their account on any trade. So, if you’re using USD$1,000, you must never let yourself lose over $10 on a trade.
For Your Debt
The obvious benefit to day trading is that you can see an immediate, monthly return on investment. Commodities and other longer term investments often rely on dividends, or yearly returns, to yield results. Also, only a small amount of capital is required. The risk is of course that you can lose it all, or if you’re unable to keep a cool head, lose lots on trades in a single day.
Forex is certainly an option for getting out of debt – for those with a cool, calm head, money to spend and dedication.