How to be a forex investor is simply a guide to how to find your way in to the forex market and trade profitably. It is journey that must start with a decision to give forex a try. But that decision should be borne out of deep understanding of what forex is about. Something may be good and rewarding but not good for you. How to be a forex investor is not as hard as it may appear at a first look. The truth is that, the complexities associated with forex are over blown. When most people thing about forex what comes to their mind are impossible charts, graphs and loads and loads of data to process. While it is true that forex is not a walk over, it is also important to know that it doesn’t require so much in terms of technical knowhow. There is no specific back ground in finance that is needed and whatever technical knowledge needed can be easily picked along the way.
TYPES OF FOREX INVESTMENTS
By types of forex investments, we mean the different ways you can trade forex. There are several ways an investor can choose to enter the forex market. Some of these include;
When the investor enters the foreign exchange market as a trader, he/she then is involved in the actual buying and selling of currencies with no intermediary.
Low cost, this is one important benefit as fund managers can have very high fees that are also to be even when loses are incurred. This is one of the best for a small investor who does not have the investment to worth hiring a fund managing firm. It also gives the investor the chance to learn in details how forex work and the secrets of trading. So it’s a form of practical education as well as the chance to be responsible for your trade decisions.
For a starter who has not had a good foundation in forex trading, the chances of losing are multiplied as he is exposed to all the risks of forex trading with no experience to buffer the jolts. There is also the issue experimenting with your hard earned money which doesn’t sound good.
This is a situation where the investor hands over his investment o are managed and controlled by professionals. The investor is passive and takes only few decisions concerning how his forex account is run. This is the best for institutional investors with no experience in forex trading as it comes with some forms of guarantees.
ADVANTAGES OF MANAGED ACCOUNTS
The fact that the fund is handled by professionals lowers the risk margin and raises the chance of profit. There is also the point about freeing the time of the investor who can be involved in other endeavors. It is perfect for busy people or those who don’t have the will to learn how to trade on their own.
DISADVANTAGE OF MANAGES ACCOUNTS
It can be argued that the managers may not give in a hundred percent commitment since it is not heir money which is at stake.
IMPORTANT SKIL OF A FOREX INVESTOR
There are some few skills that will make one a better investor in forex. They are giving below not to serve as a screening test for those who may or may not come into forex but as a guide which tells you what trait to encourage as you plan to enter forex trade.
Love of knowledge
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.