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Forex multi-account manager Z-X-N
Accepts global forex account operation, investment, and trading
Assists family office investment and autonomous management

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In the two-way trading field of forex investment, it is not recommended for young people with other career options to choose forex trading as a career path.

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From the perspective of industry attributes, if we use traditional and emerging industries as the dividing line, the forex trading industry clearly falls into the category of traditional industries, and can even be defined as a sunset industry in its late stages of development. This attribute is even more evident when compared with emerging industries such as digital currencies or stablecoins.
The core reason why it is not recommended for young people with other career options to venture into the forex trading field is that the profit margin in this industry is inherently limited. Forex investment profits mainly rely on the exchange rate fluctuations between different currencies, and these exchange rate fluctuations themselves have clear boundary constraints. The limited fluctuation range directly determines that the expansion and extension of profits is difficult to break through. This means that even if young people achieve stable profits in the forex trading field and achieve relative career success, their final gains are often insufficient to cover daily living costs and cannot support a stable quality of life in the long term.
This conclusion is not a subjective conjecture, but an objective understanding derived from actual investment experience involving millions of dollars. Following the 2008 global financial crisis, central banks in many countries around the world have used the US dollar interest rate as the core anchor when formulating monetary policies. Interest rate policies across countries have gradually formed a substantial synergy and convergence, such as simultaneously implementing interest rate cuts or hikes in different economic cycles. This policy synergy has directly led to a continuous narrowing of interest rate differentials among the eight major currencies, significantly suppressing exchange rate volatility. Although after 2020, driven by some short-term unforeseen events, exchange rates experienced a period of fluctuation and rebound, the overall volatility remains at a low level in the long term. This low volatility pattern directly compresses the profit margins of forex trading, forcing investors to control risk by reducing position size and trading frequency. This change has had a particularly significant impact on short-term trading funds that heavily rely on exchange rate fluctuations, leading to a continuous decline in trading activity in the entire forex market.
For young people determined to enter the forex investment and trading field, the following question is likely to arise: If they are explicitly discouraged from getting involved, why are they still engaged in this industry themselves? In fact, the answer to this question is closely related to an individual's financial foundation and industry background. As the operator of a Chinese foreign trade factory, I accumulated millions of US dollars in reserves as early as 20 years ago. Due to the restrictions of China's foreign exchange control policies at the time, this offshore capital could not be directly remitted into the country. To achieve effective allocation and preservation of value, I spent 20 years deeply studying the foreign exchange investment and trading industry, gradually building a complete trading system and risk control logic. Twenty years of professional experience combined with millions of US dollars in initial capital enabled me to adopt a long-term, low-leverage, and stable investment strategy, consistently achieving an annualized return of over 10%. This level of return is far higher than the return from depositing funds in a bank for fixed-term wealth management, which is the core reason why I continue to work in this industry. It should be clarified that this level of return is completely unreplicable for small-capital short-term trading. In reality, small investors attempting to achieve stable annualized returns of over 30% through short-term trading often face the risk of margin calls or continuous losses. Even if they choose a long-term investment strategy and achieve a stable annualized return of 10%, the absolute return is still insufficient to cover daily living costs. This is an industry reality that young investors must face.

In the two-way trading system of foreign exchange investment, investors' choice of foreign exchange futures or foreign exchange spot as trading instruments is not a random decision, but rather needs to be based on a precise match between the core attributes, trading rules, and their own investment needs of the two types of instruments, with clear preconditions and constraints.

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From the underlying differences in core transaction costs and matching strategies, the most significant difference between foreign exchange futures and foreign exchange spot lies in the presence or absence of overnight interest: foreign exchange futures trading does not generate overnight interest, while foreign exchange spot trading is accompanied by an overnight interest payment mechanism. This difference directly determines the direction of strategy matching for the two types of instruments—foreign exchange spot naturally possesses the basic conditions for carry trades, while foreign exchange futures, due to the lack of overnight interest payment logic, are inherently unsuitable for long-term carry trade strategies. Meanwhile, foreign exchange futures have clear holding period restrictions. In practice, it is essential to strictly adhere to the principle that "the holding period should not exceed the cycle of a single main contract (usually within 3 months)," resolutely avoiding rollover operations before contract expiration to eliminate additional costs and potential risks incurred during the rollover process.
For large funds of millions of dollars, when implementing a long-term carry trade strategy, prioritizing spot foreign exchange over futures offers three main advantages. First, there is no rollover hassle and the holding period is flexible. As long as investors have a clear understanding of the current and future currency interest rate differentials, they can hold spot positions for a long time without frequent contract rollovers, effectively reducing slippage losses and transaction costs from frequent trading. In contrast, the costs incurred by rollover operations in foreign exchange futures continuously erode investment returns, making it far less cost-effective than spot in the long run. Secondly, interest rate differentials offer a stable compounding effect. Overnight interest on spot foreign exchange contracts is automatically credited daily. As the holding period lengthens, interest income accumulates and compoundes, making the returns on long-term investments more predictable. Furthermore, investors can accurately calculate annualized returns based on current interest rate differentials, facilitating clear investment planning. Thirdly, it is more suitable for large funds. The overall liquidity of the spot foreign exchange market is far superior to that of the futures market. Inflows and outflows of millions of dollars will not significantly impact market prices, nor will insufficient liquidity cause prices to deviate from expectations. In contrast, liquidity in foreign exchange futures is mainly concentrated in the main contract, while liquidity in non-main contracts is relatively scarce. Large funds are highly susceptible to additional hidden costs due to market price fluctuations during position rollovers.
It is important to clarify that foreign exchange futures are a relatively niche investment product, with their main trading market concentrated in the United States. This geographical limitation further restricts their liquidity coverage. In actual trading, even if an investor has a strong desire to invest in a particular foreign exchange futures contract, the transaction cannot be successfully completed if there is a lack of corresponding sell orders in the market. Foreign exchange futures employ a counterparty trading mechanism; without a matching counterparty, it means that opening or closing a position cannot be completed. This liquidity risk is a core issue that must be addressed when choosing foreign exchange futures.
From a theoretical perspective, the only potential advantage of foreign exchange futures for large-capital investors lies in risk hedging in specific market scenarios: when the trend of a currency pair moves in the opposite direction to the current interest rate differential, and the investor's interest costs have accumulated excessively due to long-term holding of the spot market for arbitrage, they can hedge the price fluctuation risk of the spot position by deploying foreign exchange futures, leveraging the fact that futures do not have overnight interest to avoid the additional burden caused by the accumulation of interest rate differentials. However, this advantage is entirely based on idealized market conditions. If there is a lack of sufficient sell orders in the market, investors still cannot establish a sufficient futures hedging position, and even if they want to use futures to avoid the risk of interest rate differential accumulation from long-term holding of the spot market, it will be difficult to implement successfully.

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13711580480@139.com

+86 137 1158 0480

+86 137 1158 0480

+86 137 1158 0480

z.x.n@139.com

Mr. Z-X-N

China · Guangzhou

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