Recently, I’ve noticed that many beginners are asking the same question—can foreign currency investing actually make money? My answer is yes, but only if you understand how to play the game.

To be honest, getting started with foreign currency investing may seem complicated, but it really just comes down to grasping a few core concepts. The global forex market trades more than $6 trillion every day, and liquidity is extremely strong—far more than stocks and futures. In the past, this was a game for institutions and the wealthy, but the internet has changed everything. Now, more than 30% of daily forex trading comes from retail traders, including people like us.

But that’s also the problem. The data I’ve seen shows that 70% to 90% of individual investors have experienced losses. Why? Mainly because they don’t know how to use leverage and margin. Leverage is like a double-edged sword—it magnifies your profits, but it also magnifies your losses, and it amplifies your fear and greed at the same time.

There are three main ways to get started with foreign currency investing. The simplest is currency exchange, like exchanging yen when traveling to Japan. Then there’s foreign currency time deposits: you open an account at a bank to buy and sell foreign currencies—low risk, but also low returns. Finally, there’s forex margin trading—this is the real “forex trading,” and it’s also the highest-risk, most opportunity-rich way.

Personally, I think if you want to take part in the forex market seriously, margin trading is a must. The entry barrier is very low. On some platforms, you can open an account with just $50, and you can trade more than 60 currencies. Leverage ratios are usually 50x, 100x, or 200x, and so on. For example, if you deposit $1,000 and trade EUR/USD or other major currency pairs with 100x leverage, then if the price moves by just 5%, your account balance will change by $5,000. That’s the power of leverage.

But that’s also why I have to emphasize risk. Many beginners don’t know how to control leverage, and then they end up losing their principal in a single market move—that’s called “liquidation.” So my advice is: when you’re starting out, use low leverage—no more than 10x. Once you’ve built up experience, then consider increasing it.

When choosing a trading platform, you must check its regulatory credentials. I would prioritize platforms regulated by FCA, ASIC, or NFA. These regulators are very strict, and their oversight can help protect your funds.

As for which currencies to trade, beginners should start with high-liquidity ones. EUR/USD (EUR/USD) is the most actively traded currency pair, accounting for about 27% of global trading volume. These currency pairs have low spreads, smaller volatility, and lots of information, making them especially suitable for beginners. Commodity currencies like the Australian dollar have bigger price swings—profits can come quickly, but losses can also come quickly—so they’re not very suitable for beginners.

My own trading takeaways are like this: First, you must make a trading plan and follow it strictly—don’t frequently change your strategy. Second, set your stop-loss and take-profit levels; once you reach your target, exit decisively. Third, start with smaller position sizes and use lower leverage to build experience. Fourth, practice with demo accounts—this really helps, because it lets you test different strategies in a no-risk environment.

The key to getting started with foreign currency investing is to have a clear awareness of risk. The forex market is open 24 hours a day, prices move quickly, and you need to keep making decisions, which creates a lot of psychological pressure. If you just want to mess around for a side income, I’d advise you not to get involved. But if you’re willing to spend time learning, master money management skills, and create a solid trading plan, then the forex market can indeed provide plenty of opportunities.

My recommendation is to start with a demo account. Many platforms offer free demo funds for practice. That way, you can learn without worrying about losing real money. Once you’re truly ready, move on to live trading. Remember, forex investing isn’t a get-rich-quick game—it’s a long-term process of learning and honing your skills.