Trading Forex: What to Compare Your Performance to?

Filed under: Learn Forex Trading |

Picture 2If you have only made 5-10% returns for the year this year on your forex trading (as I have!) and was hoping to do much, much better, then don’t be too hard on yourself. There would be many professional financial managers who would kill for those kinds of returns this year. Let take a look at some alternative methods of investment and see how you would have done this year.

 

The FTSE 100 has had a much better year this year, but it has remained unspectacular. If you had invested in a FTSE100 tracker at the start of the year, you would have had just over 5% returns. Not bad, but if you had invested at the start of 2000, 12 years ago, you would still be carrying a heavy loss. With that in mind, for me, investing in the FTSE 100 is no longer a viable investment plan.

 

The average hedge fund manager in 2012 has not done very well at all. In my opinion, hedge funds are a risky form of investment. You only generally see the best performing funds, and the badly performing ones do not make the limelight. A lot of hedge funds lost money in 2012, and the ones that didn’t, didn’t in general do brilliantly either. The average hedge fund in 2012 made just 3% gains – not much better than if you had stuck it in the bank and got some interest.

 

For me, trading forex is safer than any of these forms of investment, because you can trade in any market condition and still make money. Plus, you stay in control of your own money and your own destiny, instead of putting your future in the hands of someone you have never met. For me, the risks of trading forex are much mitigated (I would consider a terrible year to be breakeven), and the potential rewards are vast (I would consider a good year to be 50% gains). Therefore, I know what method of investing I will be taking again next year…

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