Investment is gaining attention among the public, with countries starting to recommend it. Among this, “overseas FX” is particularly popular. However, you may also hear opinions suggesting that it is better to stop overseas FX. This time, I will explain whether “you should really stop overseas FX or if you should challenge it.” I will also introduce the reasons why it is said to be better to stop.
Should You Stop Overseas FX?
To conclude, it depends on the person. Some people should start overseas FX, while others should definitely refrain from it. For those who find it hard to imagine, think of a “car.” What would you think if someone said, “Cars are dangerous vehicles, so you shouldn’t ride them”? Many might think, “Isn’t it all about how you drive?”
Of course, if you drive dangerously, you shouldn’t be in a car. However, if you follow the rules and drive correctly, a car can be a convenient means of transportation. Similarly, whether you should refrain from getting involved in overseas FX depends on the individual’s “approach.”
Reasons Why It Is Said That You Should Stop Overseas FX
When gathering information about overseas FX, you may regularly come across statements like “it’s better to stop overseas FX.” This is mainly due to five reasons. Here, I will explain the details of the “reasons why it is said to be better to stop overseas FX.”
Reasons Why It Is Said to Be Better to Stop Overseas FX
The first reason is that 40% of investors lose. According to a survey by a certain specialized institution, it was found that 60% of people win in FX. However, conversely, this means that 40% are losing. In other words, some people might think, “There’s nearly a 50% chance of losing.” Therefore, some people say, “It’s better to stop overseas FX.”
However, it can also be viewed that if you work hard, you can win with a 60% probability. It is not necessarily a low win rate investment, so it might be worth trying.
There are no limits on leverage.
The second point is that there are no restrictions on overseas FX. There are FX brokers where you can apply leverage of 50 times, 100 times, or even over 1,000 times.
Leverage affects not only assets and profits but also losses. If you use 1,000 times leverage, both your assets and profits will increase by 1,000 times, but so will your losses. However, this is not strictly the case. Even with 1,000 times leverage, losses can be kept to about 1 to 2 times.
So, be careful as the notion that “high leverage = danger” is not universally true.
There is a possibility of incurring large losses.
The third reason is that there is a possibility of incurring large losses. Since overseas FX is an investment, there can be losses. In fact, there are many people who have incurred significant losses. However, this can be sufficiently avoided depending on how you approach it. There are traders who have reduced risks to the extreme and made profits in the hundreds of millions.
Instead of thinking, “I won’t do it because I might incur losses,” consider “how can I minimize my losses?”
There is no method to win 100%.
The fourth reason is that there is no method to win 100%. The theory is, “Since there is no guaranteed winning method, you will eventually lose, so it’s better not to do overseas FX.” However, there is no method that guarantees 100% success in anything. This means that this is not limited to overseas FX.
While there is no method to win 100%, you can get closer to a 100% win rate. If you want to increase your win rate, study a lot and gain trading experience.
The mental burden is significant.
The fifth reason is that the mental burden is significant. Since investments can fluctuate wildly, some people cannot endure it. Overseas FX is said to have a “large mental burden,” but this can be controlled.
For example, let’s say you have an investment fund of 100,000 yen. If you bet 200,000 yen, the mental burden would be significant. However, what if you bet 100 yen? It probably wouldn’t be a strong burden. In this way, the mental burden can be alleviated, so don’t worry.
People Who Should Stop Overseas FX Lack Basis
When listening to people who say “it’s better to stop overseas FX,” many of their statements lack basis, and often they speak from their own assumptions or images without having actually tried it. I want you to recall once again: is it really better not to ride in a car because it is a dangerous vehicle? I don’t think everyone would unanimously say “yes.”
The same goes for overseas FX. By accumulating knowledge and understanding the risks, and then operating correctly, it can become one means to enrich your life. Don’t be swayed by negative information; think for yourself and act accordingly.
Characteristics of People Who Should Stop Overseas FX
Overseas FX is not a dangerous investment. However, there are certainly people for whom it is better to refrain from it. For example, those who cannot manage risk or assets. It can also be said that people who cannot put in effort may find it quite challenging. Here, I will explain the details of the “characteristics of people who should stop overseas FX.”
Characteristics of People Who Should Stop Overseas FX
The first characteristic is those who cannot manage risk or assets. It is dangerous for someone to invest money without thinking ahead. This is because investments carry the possibility of loss. You should carefully consider questions like, “If I invest this amount, what potential loss could I incur?” and “Is it okay if I face that loss at worst?” If you can manage risk and assets, your chances of winning will increase.
People Who Cannot Put in Effort
The second characteristic is those who cannot put in effort. You cannot achieve good results without studying, and you won’t lose weight if you don’t diet. The same applies to overseas FX. If you cannot put in effort, you will likely never win. However, it is said that there are more people in the world who cannot put in effort. Therefore, just trying a little harder can significantly increase your chances of winning.
While there may be tough times, if your chances of winning increase just by putting in a little effort, it is worth pursuing. In fact, there are traders who have steadily accumulated knowledge and earned hundreds of millions.
People Who Aim for a Quick Turnaround
The third characteristic is those who aim for a quick turnaround. Investing carries dreams because it offers the chance to build assets worth hundreds of millions, regardless of academic background or qualifications. However, many people get overly focused on this and aim for a “quick turnaround.”
Naturally, if your target amount is high, the associated risks will also increase. Since risks and returns often correlate, it is generally recommended to adopt a steady approach to earning profits.
People Who Want to Start Because It Seems Easy to Earn
The fourth characteristic is those who want to start because it seems easy to earn. FX can be easily started by anyone. However, it does not mean you can earn easily. It is important to recognize that “easy to start” and “easy to earn” are completely different matters.
Overseas FX is not as easy as it sounds. However, it is a world where effort is rewarded. If you want to earn, make sure to study or practice a little every day.
Attractions of Overseas FX
Having discussed some negative aspects, let’s now introduce the attractions of overseas FX. Overseas FX is a highly promising investment, making it suitable for anyone. You can start with a small amount, so it’s not a problem if you can’t prepare a large investment fund. Now, let’s explore some of the attractions of overseas FX.
1. Can Start with a Small Amount
The first attraction is that you can start with a small amount. Stocks are often cited as a comparison, but in the case of stocks, a certain amount of capital is required. This is because stocks are typically purchased in units of 100 shares. For example, assuming one share costs 2,000 yen, you would need at least 200,000 yen to buy that stock.
In contrast, overseas FX can be started with just a few hundred yen. Losing 200,000 yen would be painful, but losing a few hundred yen is more manageable. If you want to gain investment experience, consider debuting in overseas FX.
2. A System That Prevents Total Loss of Assets
The second attraction is that there is a system in place to prevent the total loss of assets. This is due to the “margin call” system. A margin call is a mechanism where the FX exchange takes remedial action before a trader’s assets reach zero.
For example, let’s say there is an FX exchange with a margin call rate of 20%. If a trader has 100,000 yen in assets, the trading will automatically be halted when their assets decrease to 20%. In other words, trading will stop when the investment balance reaches 20,000 yen.
3. A System That Prevents Debt
The third attraction is that there is a system that prevents debt. The margin call system is not guaranteed to activate. Occasionally, it may not trigger, which could lead to losses exceeding the initial investment. However, overseas FX has a “zero balance system.”
The zero balance system ensures that losses do not exceed the amount invested. For instance, if you have an investment of 100,000 yen and incur a loss of 1,000,000 yen, normally you would have to repay the 900,000 yen loss. However, overseas FX will waive that 900,000 yen.
Even in the worst-case scenario, losses will be limited to your assets. You cannot incur debt from losses in overseas FX, allowing you to trade with peace of mind.
4. Can Trade Anytime and Anywhere
The fourth attraction is that you can trade anytime and anywhere. With overseas FX, you can trade from anywhere as long as you have a smartphone. This includes during your commute, at school, or even while traveling. You can also utilize your break time to trade. This is arguably the greatest attraction of overseas FX.
Conclusion
In this discussion, I explained the “reasons why it is said to be better to stop overseas FX.” There are various reasons, such as “there is no method to win 100%” and “there is a possibility of loss,” but none of these are well-founded.
Whether to stop or start depends on the individual. In fact, there are people who make overseas FX their profession, and the term “investor” is becoming more widespread, so it is not necessarily a bad thing. If you understand the risks and operate correctly, it can be a means to enrich your life.
Instead of being swayed by negative information, equip yourself with knowledge and consider whether you should “stop or challenge yourself.”