FOREX trading in Sri Lanka is surrounded by mystery. For starters, there are confusions about its legality. Then there are things like “The Sakvithi Scam” which naturally makes people reluctant to invest in anything. And then there’s this misconception that it’s gambling and all based on luck. Those three and many other factors make Sri Lankans look at FOREX trading with mistrust.
What is FOREX Trading?
In very simple terms FOREX trading is exchanging one currency for another. And FOREX stands for Foreign Exchange where all the exchanges are happening. But unlike a stock market, there is no central marketplace. Everything is done electronically via computer networks. It’s the worlds largest financial market with over 2000 billion dollars exchanged every day. So now it’s your turn to have a slice of the pie.
Is FOREX Trading Risky?
Yes, it is risky. Almost every trading site has a warning text that says FOREX trading is risky and you might end up losing your investment.
When you buy stocks there is no guarantee that they will go higher. But you or your stock broker will minimize that risk by analyzing past data, the performance of the company etc. Similarly, in Forex trading you can minimize your risks by looking at past trends, setting stop losses etc.
So what about all those stories about people losing all their money in minutes. Yes, you can lose all your money in minutes if you trade foolishly using high leverages. And greedy people usually lose their money this way. It is important to keep in mind that Forex trading is not a get rich quick scheme. You need to be knowledgeable, disciplined, patient and intelligent. If you don’t have these qualities I guess you can stop reading the article now and find something better to do.
How Beginners with No Knowledge Can Profit from FOREX
Up to now, I was talking about how you need to be knowledgeable to do FOREX trading. And now all of a sudden I’m talking about how you can profit with absolutely no knowledge. This is thanks to a new feature introduced by FOREX brokers.
Now you can start making money from Forex trading with zero knowledge thanks to a method called copy trading. The idea is so simple it’s a miracle this wasn’t introduced long ago.
What you do is instead of learning all the finer details of Forex trading copy the Forex traders who are already successful. These are traders who’ve spent years studying the currencies and are already making money from trading. So obviously you have a higher chance of making money.
Getting Started with Copy Trading
I’m using eToro as my Forex broker so the following examples/steps are how it works on eToro. Some other platforms offer very similar methods. For a more detailed read checkout my copy trading article.
1. Register with eToro
The first step is to register with eToro. As mentioned I use eToro but if you have preferred platform you can use that. Click here to register with eToro >>
2. Fund your account
You need money to trade so add some money to your account by clicking the “Fund Your Account” button at the top right. There are quite a few options available to you. I personally use Skrill because unlike PayPal it allows you to receive money as well.
3. Go to Openbook
This is the social trading platform of eToro. This is where you’ll find the top traders. Your eToro user name and password works here so log in using those credentials.
4. Click the “People” link in the top left corner
You should see a screen which says “Discover People”. The default search is fine so just click the “Search” button and you should see a screen similar to the one below.
Sort the list by the number of copiers. You can do this by clicking on the copiers column header. If lots of people are following someone it’s usually a sign of consistent performance. Click on any profile link to see the full profile.
5. Start Following and Make Money
Once you click on the profile link you should go to a page similar to the one below. In that profile click the “Copy” button to the bottom left. It will show you a dialog box asking how much to allocate for this investor. As a practice allocate at most about 20% of your funds to one copy trader.
I hope now you realize why I said you can make money with Forex trading with knowing absolutely nothing about currencies. Do keep in mind that copying successful traders don’t guarantee success or profits. It just minimizes the risk because these are professional traders who study currencies for a living.
You might wonder why these traders are so generous with their knowledge, well for starters they are paid by the Forex brokers. And more copiers they have more money they make. And why are brokers doing this? Because it encourages trading and when more people trade they make more money.
Choosing a FOREX Broker in Sri Lanka
In the previous section about copy trading, I selected eToro as my Forex broker. So I thought I should explain why I chose eToro. To do Forex trading in Sri Lanka you need to deposit and withdraw money. Because eToro has multiple depositing and withdrawing methods this is not a problem. For example, if the Forex broker only allows PayPal you cannot withdraw your money to Sri Lanka.
The next thing is its ease of use. Everything is done online so you have access from anywhere in the world. You get tutorials to learn about trading, constant and timely notification about trading opportunities and bonuses when depositing money. Plus you have the OpenBook social platform where you can socialize with successful traders and copy them. And this allows you to profit from Forex without knowing absolutely nothing about Forex.
If you think any other Forex broker offer better terms be sure to let me know in the comments. In the meantime join eToro >>
Free Resource to Learn FOREX Trading
Although you can immediately start making money with Forex thanks to CopyTrader, the profits will be small unless you invest a large amount. So you need to learn the art of Forex trading to really make a profit from it. It’s not easy but you don’t need to be super smart either. One of the leading guides recognized across the industry is the eToro Forex guide. It’s long but very comprehensive. Make sure to go through it carefully. There is no rush because you’re already making some income via copy trader.
While going through the guide try your hand at Forex using the practice account provided to you by eToro or whatever Forex broker you choose. This way you’ll be familiar with the workings of the system when you’re ready to trade for real.
FOREX Trading in Sri Lanka is Possible and Profitable
What it isn’t is a risk-free method to make lots of money in quick time. It’s true some lucky people can make a lot of money quickly but that is not sustainable. Get started with copy trader because you’ll be earning some money ( how much depends on what you invest ). Then take the time to learn about Forex trading and truly start making a profit from it.