Foreign exchange, or forex, trading is hard. Many who get into what is the largest financial market in the world end up failing.
That is, of course, a huge reason why there are so many trading apps designed to help amateur traders figure out the markets, from cryptocurrency to typical stock exchanges—and now forex trading, as well. Take Robinhood, Public, and Personal Capital for example. All are designed to help the everyday Joe and Jane become traders.
In the fintech world, forex apps and other trading apps are one of the trends that we’ll see continue to grow in 2021. I spoke with one app developer, Maksim Konstantinov of FXBro, about why.
Shama Hyder: Why does forex trading have such a high failure rate?
Maksim Konstantinov: Forex traders who end up failing in this market generally do so because they’re not maintaining trading discipline. In other words, they’re allowing their emotions to get in the way of their trading decisions. Having just a few major wins while suffering a multitude of small losses is how the game goes.
Another reason for the high failure rate of forex traders is trading without having a plan. A clear trading plan should be followed. Otherwise, you’re trading rudderless. Risk management and expected ROI should be part of any forex trader’s plan.
Finally, another reason so many fail at forex trading is that they have unrealistic expectations for what they can achieve. Regardless of what anyone tells you, forex trading will not get you rich quickly. This is something you should plan on being in for the long-term. Your trading strategy should not be used with the expectation of getting abnormally high returns. That usually just results in risking more capital than is necessary.
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Hyder: With all those caveats, why would people get involved in forex trading?
Konstantinov: It can provide you with decent returns if you come at it in a certain way. These days, there is no shortage of apps and services that promise to help you enjoy a wildly high ROI. Many of them make it seem as if forex trading is easy, as long as you get the right signals. However, these are scammers. The truth is that forex trading can be incredibly difficult.
But there are still some genuinely good ones out there. Ours, FXBro, which I started with my sister Nina, provides academic trading services and ideas to help people who want to get into forex trading. By using whitehat apps and Telegram channels, we’re doing our best to help our customers find financial freedom. We never promise pie-in-the-sky ROI—but we can help you trade successfully.
Most of these kinds of services just see the dollar signs of their customers. FXBro sees them as family. They come from humble beginnings, saving up $10K to invest in their business after becoming serious students of macroeconomics and finance. Today, they manage $25 million.
Hyder: How did FXBro begin?
Konstantinov: We started on Instagram just for fun, and ended up getting people interested in following our trading ideas. Nina was the first to get us started, and then I came on the scene.
Soon we’ll be releasing forex trading apps, along with a wide array of online courses focused on finance and trading. We’re fueled by our vision of helping as many people become financially independent as possible. The app works on a PPM subscription model, which provides customers with signals and trading ideas that can act as a guide for trading on the forex markets.
We always make sure to emphasize that forex trading is actually really challenging. That’s why we recommend our customers study at least the basics of investing and the forex market. Knowledge is vital, but the practice is what makes you better.
I predict we will continue to see apps like Konstantinov’s FXBro and other trading apps pop up as more Millennials and even Gen-Z decide to get into the trading game. Established fintech brands, as well as startups, will have to keep an eye on this burgeoning space to ensure they stay competitive and are giving customers what they want as we head into 2021.