We often get asked what we do for a living and when we say that we're forex traders we're usually met with blank stares. Then we explain that we trade the fluctuation of currencies – people can relate to going on a trip and checking out the currency rate and buying Euros, Pounds or Yen and then it makes sense to them. Kind of.
We tell them that it's kind of like day trading stocks but different because it doesn't depend on how a company does or what their profit margins were or who their CEO is. Rather it depends on the totality of international commerce and is influenced by economic news reports, speeches by political or economic key pins, natural disasters, terrorism, broker manipulation, World Bank decisions and other factors. At times there's absolutely no discernible reason for why the market makes a large unpredicted move. Even unfounded rumors can cause the markets to make huge moves at any time of the day or night.
There used to be a time when currency trading wasn't even an option for the average trader. Trading of currencies was restricted to large banks, corporations, governments and financial institutions before they opened it up to retail traders who eagerly joined the ranks of those wanting to become instant millionaires. Now over 5 trillion dollars are traded every single day, way more than what is traded on all the stock markets combined, including commodities, options, futures, etc.
I went online to find out how many retail forex traders there are but couldn't find any numbers. Those of us who trade know that there are a lot of us, but only a very small number of us are consistently profitable. Malcolm Gladwell, in his insightful book "Outliers", says that you have to put in at least 10,000 hours to get good at anything and most people aren't up for doing that. They want to just try it out, be successful right away and start making loads of money.
We once had a friend who mocked us for saying that trading was challenging and difficult. He started right out using his "intuition" and made a bundle and he made us feel like fools. We didn't have his kind of "intuition" and we were very disappointed. But here we are 10 years later and we're still trading. He gave up after 6 months, two margin calls and a huge dent in his savings account. We've put in our 10,000 hours. Have you???