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Chris Bell

Is Forex Trading a Good Investment?



Investing in financial markets is one of the most profitable ways to multiply money. It can be considered as a source of additional income, as well as stable income, depending on the goals and the availability of free time.

Devoting funds in Forex instruments allows making regular investments in buy/sell deals while getting income even during a crisis when other investment options stop giving noticeable returns.

Forex Investment Object

Since the entry into force of the free currency exchange agreement, the Forex market has been considered the prerogative of financial institutions, central banks and wealthy investors. But, the advent of the Internet, changes in infrastructure and technology development have changed the current conditions by opening access to the foreign exchange market for all investors.

High liquidity and tools such as leverage have contributed to the rapid development of the market, making it an ideal place for many traders in terms of accessibility. The current price of each currency depends on objective factors of demand and supply in the market, and cannot be manipulated, as the size of the market does not allow even the largest players, such as central banks, to arbitrarily move prices for a long time.

It is important to understand that currency trading in the Forex market means buying and selling currency pairs, which reflect the ratio of the value of one currency to another. Therefore, the purchase of a currency pair does not imply the purchase of actual currency, but only provides a contract for the difference at a fixed price.

Forex Investment Risks

There is a certain lack of understanding regarding the risks in the Forex market, due to its decentralization and lack of regulation. Nevertheless, significant steps have been taken to create a centralized platform — Electronic Communication Network (ECN), to attract more market participants, which contributes to a more transparent and fair pricing process. This is a positive step for individual traders who gain an advantage by having access to better prices.

Traders who have access to interbank liquidity are certainly less at risk than traders trading through Forex brokers with a dubious reputation. These are primarily brokers who can influence prices, including trading against their own clients.

The result of investing in Forex

For many individual traders, especially those with limited capital for investment, Forex remains the most accessible and attractive market. Cause you may start trading even with 10 dollars. Such approaches as intraday trading based on technical or fundamental analysis are considered the most common approaches in the foreign exchange market. A good example of reliable forex broker is JustForex. It offers attractive trading conditions on its accounts.

There are different opinions regarding the possibility of making a profit in the FX market. Someone thinks this is a game, someone makes a big profit out of it. Anyway, the statistics of participants shows that about 95% of novice traders lose their money. Therefore, each participant must know the characteristics of this market, have a proven trading strategy, strict discipline of compliance with their strategy, as well as risk management. So, everything is possible with a proper approach.