Connect with us

Business

Why You Shouldn’t Invest Your Savings in Forex or Crypto

Shouldn’t Invest in Forex or Crypto

With the latest developments in the trading world, you’ve probably heard of those people that literally bet their entire life savings on some cryptocurrency or on Forex. It goes without saying that they weren’t professional traders and that they made one of the rookie mistakes no one should ever make.

However, it’s a clear and proven fact that, if there are enough rumors, people will eventually invest their savings in either crypto and Forex. Should they do that? Definitely not. Even brokers advise against such practices.

If you’re not convinced, let’s take a look at the main reasons why you shouldn’t invest savings into crypto and Forex!

Remember the First Rule of Trading

First and foremost, you shouldn’t invest your savings in Forex and crypto because the first and most important rule of trading says otherwise. Namely, it states that you should invest only what you can afford to lose.

Obviously, savings are not something one should be willing to lose. On top of that, there’s a difference between investing in stocks or assets and investing in Forex, crypto, and binary options – you can see this page for more information about the latter. What’s that difference?

Highly Volatile Markets

Forex and crypto, especially cryptocurrencies, are known as being highly volatile. Today you invest, tomorrow you can be $2000 richer, and two days later you can lose everything you have invested.

While crypto and Forex markets tend to regulate themselves and grow in value again, such a thing only happens after a long time. For example, certain cryptocurrencies can cycle between minimal values before they either crash or explode. In most cases, making a wise investment in crypto is more dependent on luck than knowledge.

You Can’t Expect Quick and High Returns

Due to the same volatility mentioned above, you can’t expect to get rich and get rid of debt overnight with a single investment in a cryptocurrency or foreign currency. This is what most people don’t understand when putting their savings on the line.

The volatility of crypto implies daily checking and analysis, as well as daily trades in order to make a profit. One cannot expect to disk $50k in some random crypto and expect 100% returns in the very same day.

You Want to Get on the Hype Train

Naturally, you shouldn’t invest in Forex or crypto just because the markets blew last night and you want to get a seat on the hype train. If you’re acting based on a mere rumor or on the fact that the market is blowing up, you’ve already lost the right and proper time to invest.

It goes without saying that, when you feel like you want a seat on the rich train, that train has already left the station. Given this, it’s clear that savings should never be spent on something that only might make you rich.

The Bottom Line

In the end, the most important takeaway is that no one should invest their savings in pretty much anything. It’s simply not worth it. If you want to trade with some extra money that you don’t mind losing or would spend on something irrelevant anyway, then feel free to do so.

But when you have debt, rent, or a loan to pay off, savings should be cherished more than any potential winnings made off of investing in crypto and Forex!

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Comments

Recent Posts

Categories

Trending