If you are getting fed up with the mundane and routine world of traditional financial instruments such as mutual funds, blue-chip stocks, and bonds, then perhaps it’s time for you to consider the very different but equally exciting high paced worlds of penny stock day trading and Forex online currency trading.
Despite being very different in terms of what you’d actually be trading, with penny stocks being shares in microcap upstart companies and Forex being national currencies, they both share the fact that they can be traded online on a day trading basis with near instant execution and low commissions. Such offerings make them very attractive to the experienced investor who is looking to leverage his capital beyond the traditional 12 to 13% maximum returns which can be expected in this mainstream stock market over the long run. If you have access to a quality list of penny stocks to watch, such investments can be highly profitable.
However the amazing gains that are possible in the world of penny stocks and Forex also come at a price, and that is of course risk. In fact it’s actually possible to lose more than your initial investment due to the use of leverage. With Forex for example it’s possible to control over $100,000 of foreign currency with as little as $250 using 400 to 1 leverage. This practice is generally considered highly risky however as if the currency moves against your favor even a little bit, not only will the initial $250 be wiped out by you will also end up owing the brokerage house money.
This can be mitigated however with many modern automated forex trading systems which involve a computer system which is constantly monitoring your balance in real time and which automatically sells out your position as soon as you reach zero so that you never end up owing a negative balance the broker. Such technologies can mitigate but never totally eliminate the high risks associated with these trading strategies.
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