Forex investing should be viewed different than Forex trading because it is. Investing, regardless of the market traded is longer term than trading. Most people are familiar with Forex trading so let’s cover a bit more about Forex investing.
Those who wish to invest in Forex will typically have several things in common.
– They will be looking for larger moves in the Forex market and therefore a larger amount of profit per trade.
– Most will have a larger amount of working capital – greater potential reward comes a greater level of risk.
– Willing to accept a larger amount of risk – The level of comes with the larger potential reward per move.
– Less hands on – Most Forex investors don’t want to look at the screen every single day, but would rather check on their investments less frequently.
– May use more fundamental data – Forex investors may use more fundamental data than the Forex trader does. They may look at a country’s basic economic data to determine the long-term outlook for that country’s currency. Such data may include, inflation, deflation, gross national product, monetary policy, etc.
Forex investing may also be completely hands-off is the investor places their funds in a managed Forex account. In this type of account the account managers will usually take a percentage of the profits as compensation for their services. This type of fee is referred to as a performance-based fee.
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