Is forex trading worth the risk?

Forex trading is simply buying and selling of foreign currency for the purpose of making a profit out of the differences in pricing. 
The forex trading market is what determines the rates of a currency against other foreign currencies. The market is generally over the counter, which means that it is based on willing seller and willing buyer.
Mr Steven Nuwagaba, a forex trader in one of the banks in Uganda, says the forex trading market is principally between commercial banks under the regulation of the Bank of Uganda. 
Commercial banks have platforms where they offer prices for selling and buying to each other. The departments in commercial banks that are responsible for forex trading are financial markets or treasury departments.
Outside commercial banks, individuals or non-bank institutions can also trade forex using various online trading platforms provided by mainly international brokerage firms or the commercial banks. These firms have built platforms on to which anyone can sign up and start trading currencies.
How is it regulated 
The regulation is indirect to the extent that while commercial banks will be regulated by the Central Bank, individuals will be subject to the terms and conditions agreed to by the provider of their trading platform. 
Usually that provider (a broker) will be regulated in their own country of establishment by the responsible authority.
How can someone get involved?
Trading forex is open to everyone and can be done by signing up on any of the available online platforms. The most common platforms, include XTB, Pepperstone, Trading212, FP markets and IC markets.  Alternatively, commercial banks also provide online trading platforms to their customers. 
Ms Kendra Thrash, a trainer on forex trading from IM mastery Academy in Atlanta Georgia, says online forex trading involves banks, central banks, market makers, forex brokers and the platform on which enters the business.
Benefits
Like any other business, forex trading can be a good means of making money, however, its success depends on the skills, knowledge, available resources and the determination of the trader. 
“A good experienced trader with enough capital, can make a lot of money. Legendary traders/investors like George Soros are famous for making billions of US dollars out of forex trading. Annually major global banks make billions of dollars in forex trading. All these institutions are taxed which benefits the economy,” he said.
Key notes 
Ms Thrash says it is important to learn and equip yourself with information on topics of interest such as stocks and markets before indulging in forex trading.
In addition, there is a lot of discipline required when it comes to forex trading. 
“Do not use any money that you need, do not use your rent money or car payment money. Do not come into the business with a gambling mindset,” she advises.
With a stern warning, she says, individuals should trade for themselves. 
“This is correct because even where two people have the same experience and the same knowledge, the psychology of individual traders often differs and that may result into taking complete opposite decisions even when faced with the same information,” Mr Nuwagaba says.
Investment
One can invest as much money as they want in forex trading, however, it is recommended that the risk is limited by trading a small amount of money.
“The amount to invest in this activity depends on the ambitions and resources available to the trader. An institution like a bank may have significant resources to invest in such an activity, while an individual may have limited resources. The platform on which one is trading will prescribe the minimum amounts required for investment,” he adds.
It is advisable that you start with a small investment and increase as you gain experience and knowledge of the activity. Even in banks, he says different traders will be allowed different limits, depending on their experience and knowledge,” he advised.
Good broker
According to Mr Nuwagaba, the basic measure of a trader is their historical record while trading a currency.
“If they have been successful before, it means they have gained a certain amount of mastery of the factors that affect that currency and have a good read of that market. A good trader will have discipline, set limits for themselves and be extremely conscientious in their preparation and trading. A poor trader is usually casual in their attitude towards the market,” he added.
Risky business
The business of forex trading presents a lot more risk than ordinary businesses. In Uganda, especially, many people have lost huge sums of money while trading forex. Ms Thrash says risk depends on the trader. It is important to have risk management measures.
“It is how much you want to lose. Nobody should be losing money if you are using the proper risk management,” she says.  
Mr Nuwagaba adds that forex trading requires good knowledge of macroeconomics to understand the balance of payments that may affect each currency,  a keen interest in geopolitics and knowledge of how it impacts international trade and by extension the flow of money, a discipline of following economic events and news, and a good understanding of psychology.

Information
Trading forex is open to everyone and can be done by signing up on any of the available online platforms. The most common platforms, include XTB, Pepperstone, Trading212, FP markets and IC markets.  Alternatively, commercial banks also provide online trading platforms to their customers. 
It is important to learn and equip yourself with information on topics of interest such as stocks and markets before indulging in forex trading.
There is a lot of discipline required when it comes to forex trading.