Getting started in FX

It always difficult to know where to start, when it comes to areas in finance. There is so much to read, so what to start with? Furthermore, the more you read and the more years that pass, it becomes even more obvious that there is less you know. I remember back in 2005, when I started in FX, I had little if any idea of even basic terminology (what does long EUR/USD mean...?). After about 2-3 years I felt I had a good grounding. But in practice, there was a huge amount I didn't know about FX markets (which is just as true today). I recently read a great article by Rob Carver, entitled So you want to get started as a quant/systematic trader? which is full of great advice, and I thought maybe it might be worth me writing something similar on FX (albeit something far less comprehensive than Rob's article).

Most retail FX traders lose money

I've got to mention this to begin with. When it comes to equity markets, there's been a lot of talk recently about some retail folks making money during this period on the rally and also things like GameStop (and some being burned on GameStop too). The first thing to stress, is that whichever statistics you look at when it comes to retail FX traders, the vast majority of them lose money, and I don't think this has changed much over the years. Figures I've seen range from 60% to over 90% for the number of retail FX traders losing money. Historically, over longer periods of time, you'd probably find a passive long investment in S&P500 would beat most of these returns.

There are many reasons for this which you can cite, such as the excessive amount of leverage offered by many retail FX brokers. Indeed..

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