Originally Posted by taramj22
Thanks. Yep, I know I've increased my risk.
We've kept my husbands Roth IRA in mutual funds and I still have my 403B to fall back on.
Hopefully it all works out. I believe in diversifying -- (not keeping all my eggs in one basket)....while forex is riskier...the profit potential is also much higher. However, with utilizing a hedging strategy, I have also been able to minimize my risk in the forex markets as well. And, it only takes me about 20 minutes per week to manage my portfolio.
It sounds like you understand risk well enough. I guess the two fundamental things that I keep trying to learn and internalize are:
- Know why you're in an investment.
- Understand if you're being properly rewarded for your risk.
Obviously, the reason for forex's huge returns are because of it's volatility and the trader's ability to leverage. That also translates to a great way to lose one's shirt as well. Just like trading in the stock market, it's possible to reduce risk, and, by extension, reward, by combining trading techniques (trading both sides of a currency, combining a spot trade with an option, whatever).
However, the most important thing to remember is that you're still leveraging a lot. Personally, I'd be hesitant wagering more than a 'mad money' part of my portfolio and I'd probably stay disciplined about moving profits out to diversify. Then again, I know I'm not the next Soros and you very well could be.
Just remember, it only takes a 50% loss to wipe out a 100% gain.
p.s. Welcome to the board!
p.p.s. My personal path to early retirement is to live well below my means and work like a dog until then. Not the most intelligent path, but I'm playing to my strengths.