Investment in forex

Investment in forex - can you make money?

Can you make money on forex? Is it just a speculative bubble?

Forex is an abbreviation used to describe the foreign exchange market. Without the slightest doubt it is the largest and most liquid trading market in the world.

Daily trading on forex is estimated at several trillions of dollars, which means it is several times more than daily turnover on, for example, the most well-known stock exchange in New York. Many investors believe that trading on forex is the best way to own a home business.


Is it possible?

How does forex work?

Forex does not have a seat, trading does not take place on the floor, after which brokers run, does not have a main supervisory body - diametrically different from the stock exchange. That is why the foreign exchange market is called the over-the-counter (OTC) market - the over-the-counter, decentralized, interbank market. This is due to the fact that the market "lives" in electronic form, in a network of banks, where transactions are concluded 24 hours a day, with a weekend break.

Many people consider forex to be a hit, because unlike a highly volatile stock market where it is difficult to predict winning stocks that will make a profit, forex trading can make a profit regardless of whether the currency (or the broader economy) is rising or falling. . The problem, however, is to know and be able to recognize which page to find. And for inexperienced investors, it can be a big hindrance.

Forex resistant to the crisis

Undoubtedly, the big plus of forex from the investor's point of view, especially in the present times of the global recession, is its resilience, rather than its independence from the crisis. Of course, with the global slowdown, the turnover on the forex also decreases, but does it affect the profitability of investors?

Unlike stocks that are in the midst of a crisis of great losses, currency trading is profitable and during recessions and economic booms. This is due to one of the characteristic features of forex trading, which is currency pairs. This means that even when one currency loses value, the "pair" in which the currency is located gains value.

So the owner of one of them loses and earns the other owner. Forex is governed by hard law - someone loses to earn someone. Again, the main problem of investment remains the ability to read market indications.

Unlike the stock market that "creates" (but also can make it evaporate) profit, forex is a market where everything is reduced to indomitable equations. The sum of all the money earned is equal to the sum of all lost money. However, this does not mean that our profit can not evaporate, even within one night. It only shows that if we lose 10 thousand, someone just earned them. Therefore, as with any investment, trading in forex is risky. It is not safer in this regard than the stock exchange.

The international currency market plays a very significant role in the global economy and as long as there is international trade, so long will there be forex. Everyday the countries have to buy foreign currency to pay for goods, from time to time to the international acquisitions of companies, every day foreign investors are implementing projects in different parts of the globe, and finally look at each other - who did not buy us one time shirts from Thailand, socks From China, a car from Germany, did not shop in a foreign supermarket chain?

Money from such transactions before they reach the long chain of intermediaries will go to the owners, have to be exchanged for the right currency and that is what forex is for. However, despite its immense importance for trade, the majority of market participants are speculators who, using such a simple way to make money, watch the market, read indications, and make profits.

The forex advantage over the stock exchange

The undoubted advantage of forex over the stock market is, as I have already mentioned, that it is not dependent on the cycle of ups and downs in the economy, which in the case of shares give rise to either the increase in the value of our assets or the decline in their value.

Forex is an investment in which if you correctly predict the rise or fall in value of a given currency, you are making a profit. Extremely simple. The transactions are made by themselves, using brokerage platforms, by clicking a few times with the mouse. With a solid preparation, the right amount of knowledge about the foreign exchange market and the factors that affect exchange rates, this is an investment hit.

And what about the risk?
Every investment is risky. Therefore, investing is not for everyone. However, if you are aware of the risks, then forex is undoubtedly an exciting place to make money.