Understanding Forex Trading Basics for Beginners - ForeXposed


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Sunday, August 27, 2017

Understanding Forex Trading Basics for Beginners

Understanding Forex Trading Basics for Beginners

You have worked hard to earn your money, going to your job day in and day out. Every month you have been probably dream of the day that you will stop worrying about money and enjoy life as much as possible. For this dream to happen you need to stop working looking for money and let the money you own do the work for you. You need to let your money grow substantially without having to worry about it every single day of your life. That is why you should invest. The reason anyone invests is actually quite simple: to have a financially secured and safe life in the foreseeable future. Of course everyone has differences perspective about what investing should be like and what is a good investment. But there are some basic facts that you should be aware of if you are trying to succeed in this realm.

Investment, firstly, may seem like a game, but it is not. There are lots of people that see Wall Street in New York and the City in London and think about casinos roulettes and other game-like metaphors. You can actually see many different people on TV saying about how these investors gamble with the money they have in hand – normally money that is not theirs – and how they should not be trusted.

But that is a misconception to say the least. Not everyone in the investment business is a gambler not worried about the consequences, especially not after the big bonus payday. There are a lot of different agents in the vast and interconnected markets in this global economy that we live nowadays. From small investors using their retirement money to allocate into simple and easy to invest funds up to the biggest agents such as single investors and institutional investors, with enough money to rival the GDP of small countries, there are millions of possible ways to invest in this world.
Understanding Forex Trading Basics for Beginners

One of the most important and surely talked about in media outlets, agent in the global market of securities and assets are the investment companies, which mostly have head quarters in these two cosmopolitan – London and New York – cities. There are some advantages and disadvantages about putting your money into investment companies. It surely can provide many investment possibilities and some expertise as some of these firms have been investing in securities for some decades now and can be of some help.

The most interesting investing opportunities that investment companies can offer you are the possibility to spread your risk and diversify even if you do not have a large sum of money to deal with. As they are basically a pool of resources that combines together to find the perfect investment opportunity, it is easy for them to find and maintain such large of capital invested in different assets. But the truth is: you will be leaving your money to someone else’s care. And that can be even scarier than manage your own money. 


It is important to define your investment profile because it will determine if your investment horizon is short, medium or long term, and in which asset classes you should invest beyond know the composition of its investment portfolio.
Understanding Forex Trading Basics for Beginners

What to take into account to define investor profile

To set the profile, many financial institutions (banks and brokers) offer users of their systems a basic questionnaire, from which you want to define the investor profile.

However, these questionnaires be inconvenient since most focus only on the psychological investor profile. Make the type questions if the investor could stand to see a drop of 50% in its assets in a few months, or if he would prefer to have a stable and secure income but whose historical profitability is less than a more volatile investment (such as shares).

However, these questionnaires do not ask if the investor’s financial conditions are stable enough to effectively “endure” the volatility of the stock market with a very concentrated portfolio in this asset class.

Type of profile

Psychological profile investor: Here fit those people who simply can not stand the idea of losing any percentage of their savings in the financial market. And there are people who are perfectly quiet in investing all of its assets in the stockmarket.
Understanding Forex Trading Basics for Beginners

Financial profile investor: one who depend on their psychological profile. The financial profile indicates whether their assets can actually endure the bumps of the stock market, or in addition to endure, is even more desirable that a portion of it is allocated to that market.

How to get to this financial profile?

The first issue is to define the monthly investor’s income. It is important to know if it stems from his work, whether it is constant or variable. Often this factor is the major determinant of investment profile, you showing what to do to ensure a healthier future. Set the profile presumes to know the investment objectives, so its importance.

Unfortunately, the surveys do not investigate some issues. But that does not mean you can not reflect on these issues and find out what your investment profile.


We must warn of the risks of the Forex market as well as on the regularity of transactions in the light of Brazilian law. We will provide the information you need so you can make their own financial decisions.

The Forex market involves buying and selling currencies simultaneously, in pairs. The Foreign Exchange is a market whose product are coins. It can also be simply called FX and is known worldwide.

How it works

The speculator buys a relationship between two currencies – for example, $ 1 equals 1.50 reais, this equivalence relation is the object of the acquisition. With the appreciation of one currency against another, the speculator can profit or take damage. In addition to speculators, there are export and import companies in this market who seek protection against exchange variation. It is a very important global market, which operates 24 hours a day.
Understanding Forex Trading Basics for Beginners

It is a very risky market, since the operations are very leveraged, as the system allows the use of “margins” that allows the speculator negotiate a higher volume of cash than effectively applied. Thus, for example, someone may move R $ 100,000.00 applying R $ 10,000.00. If you get 10% profit with the busy amount actually profit is 100% because it is calculated on the amount busy, but the speculator receives its profitability from the amount that was effectively applied.

Thus, a 10% profit on R $ 100,000.00 equivalent to R $ 10,000.00 – as the speculator invested R $ 10,000.00 receives a profit equivalent to that applied.

All very beautiful here, but just imagine if the speculator has a 20% loss on the R $ 100,000.00 busy (loss of R $ 20,000.00): it can lose R $ 10,000.00 that applied, more R $ 10,000.00.

And risks of the market itself, there is the fact that this is an illegal operation because there is no financial institution authorized to invest in Forex. Another risk is that there are physical institutions and people picking up clients illegally in Brazil to invest in Forex.

Invita their capital safely. Search about it and draw your own conclusions.

Source/reference: MundoForexChavez.com