No beginner's luck? Be business savvy before joining forex markets, experts advise newcomers

Financial experts have warned against random trades in foreign currency markets, also known as forex trading. These arrangements indirectly cause the launch of new and unregistered companies which expose dealers to financial losses. It’s estimated that around 40 percent of Saudi dealers in the forex market are incurring losses due to their ignorance in currency market tools, with Saudi forex dealings estimated at around $5 billion.
A stock market expert at Al-Faisal University, Dr. Sadequ Al-Bloushi stressed that investors and dealers should first demand to see the registration seal of the company they wish to deal with. This could be done through relevant financial bodies in the state where the forex market is headquartered.
Al-Bloushi recommends contacting the company if it is headquartered in Europe or the United States, to inquire about the date of establishment and compare it to information on the company’s website. It is also essential to make sure that trading licenses are found in the website for international forex company, especially the British, FSA and American, CFTC seals. The trading expert warned against scams, like the one suffered not long ago by a Saudi investor who lost $500,000 because he didn’t know English. He was tempted by a fake British company that lured him to invest, telling him that he would make astronomical gains.
Al-Bloushi estimated the volume of daily international dealings in the foreign currency market to stand at $5 trillion, which means that the forex market dealings is equal the volume of the economy of the United States. The forex trade in the Saudi market was estimated to be worth $5 billion between the years 2010 and 2013.
Many experts, including Al-Bloushi, believe there is a real need to educate people about the nature of work in the currency market and its outcome on investors and dealers. The seasoned stock market expert pointed out that learning the basics of stock market trade takes time and practice, to be able to predict the changing currency value in forex trading.
Ziyad Milhim, executive director for a major company dealing in the forex market in Gulf countries and Saudi Arabia, claims there are many financial losses due to lack of education in the stock market. 
It’s easy to enter and exit the market, where investors can enter with as little as $500, and selling is easy too, with investors getting what is called a financial leverage, which can’t be found in other kinds of investments.
It’s precisely this apparent leniency that can be tricky. Milhim warns against laxity when investing in the forex market because prices fluctuate quickly during dealings which create many risks. He prefers investors to enrol in training sessions about forex before investing so as not to fall prey to blackmail. He pointed out that investors shouldn’t use more than two percent of their capital until they have enough experience about risk management and good technical analysis skills.
Many Saudis tend to jump into stock market trading without the benefit of a real expertise and are sometimes ill advised, like Hussein, a forex investor whose experience turned sour after he lost around SR350,000. According to the investor, every month he received an e-mail telling him about his profits, but he never saw a single riyal in his bank account. Profits equaled 12% to 25% of the capital according to the e-mail, but the trading office he was working with moved to Dubai and the owner was arrested after other investors filed complaints against him.