Guide to Investments in the Forex market
Virtually everyone wants to increase their savings. When it comes to saving money, a bank deposit or simply putting money in a piggy bank for big purchases or for a “rainy day” comes to mind most often.
Despite the sufficient simplicity and reliability of such investments, such savings do not bring tangible income. Moreover, they are largely eaten up by inflation, that is, by rising prices. Simply put, the deferred funds in the future can be bought less than now. Bank deposit, as a rule, involves a low rate. Therefore, it will not be possible to significantly increase your savings. In conditions of mass “cleaning” of the banking sector in Russia, the reliability of such investments also causes some concern.
There are not so many alternatives to legal high-yield investments. They become even smaller when the investor has insignificant sums, and opportunities for earning are limited.
First of all, it is worth remembering that any high-yield investment is a risk. And it is from these positions that you need to consider investing in Forex.
The risks of investing in Forex
Like all investments, successful investing in Forex depends on three components: the reliability of the partner, the experience and knowledge, as well as the external conditions (most often the actions of the state).
The first two components of a successful investment in Forex entirely depend on you.
If you decide to invest in Forex, you should not rely entirely on advertising or the promises of unknown people when choosing a forex dealer, through which you will invest in Forex. Study its history and terms of service, read as many reviews about its activities, make sure you have the necessary licenses to work in the financial markets, see the ratings of forex dealers. Only after this, make a decision about investing in Forex with a specific forex dealer.
The acquisition of experience and knowledge in order to become a successful forex investor is entirely up to you. Knowledge is necessary in order to understand how to properly trade or invest in Forex. Experience is necessary in order to apply this knowledge and make a profit.
The external conditions do not really depend on your actions. But they need to be taken into account when investing in Forex.
Forex-investment. Investing in yourself
Strangely enough, the main obstacle to a successful forex investor is the investor himself, namely his emotions. Earnings in high-risk markets require analysis, which is necessary to minimize risks. Violent emotional reactions prevent us from assessing our actions on the market soberly, as well as the actions of other participants.
That is why in the Forex market investments are expressed not only in monetary terms, but also in the time that you invest in your training, the accumulation of experience and practice, the formation of your own rules and the discipline of their compliance.
All decisions must be made independently, and responsibility for their consequences should also be borne by you. Other people’s recommendations and successes must be perceived through filters of their own experience and knowledge, testing them in practice.
If you want to earn, you need to learn how to accept and lose, that is, to gain experience even from negative cases of forex investment.
Analyzing together their positive and negative actions, as well as the positive and negative actions of other traders, taking responsibility for their decisions, you can succeed.
Opportunities for investing in Forex
The actual investment of financial assets in the Forex market can be carried out in several ways.
* Trade yourself, which requires knowledge and experience, as well as constant market monitoring and news background. Here you decide everything yourself, accordingly, and the potential income can be higher.
* With the help of a professional, create an investment portfolio that generates passive income if there is not enough time for self-trading. But this option may require a significant amount of investment. In addition, there is a risk of incorrect decision-making by a professional.
* Transfer funds to the trust management of an experienced trader or investment company. This may also require significant financial investment at the initial stage. The manager must have a license to carry out this activity. With such investment of funds, an important role is played by the degree of trust in the manager. Here you should pay attention to a stable income. It should be borne in mind that this is a long-term investment, so do not expect quick returns and high incomes.
* Use the services of copying transactions of successful traders. For the use of these services and the completion of transactions, as a rule, a commission is charged. Not all transactions can bring a positive financial result.
* Rent a trading robot. Having adjusted the robot under the requirements, it is possible to carry out trade in an automatic mode. But it should be remembered that the robot algorithm may not take into account certain situations on the market (for example, news background). So completely trust the robot would be reckless.
* Investing with PAMM-accounts. This is a kind of trust management. At the same time, trust funds are managed by several investors at once. The trader-manager commits transactions simultaneously both with his own funds, which are on the common account, and with the funds of investors. Despite protection from non-trading risks from the forex dealer, unsuccessful traders ‘transactions are also reflected in investors’ funds. There are also certain restrictions for such accounts, for example, restrictions on work in certain segments of the financial market. The activities of the manager should be licensed. However, this practice is not common in the Forex market. The investor also pays a commission to the manager for managing his funds.
In any case, no matter which method of investing in Forex you choose, you should closely monitor the market and the results of investments in order to minimize the risks of losing your capital.