Learn more about forex trading and its drawbacks as an investment for good result
The word “Forex” may still be foreign to some people. It’s normal to feel like an outsider, because this term is associated more with people who are quite experienced in the investment world. Forex or Foreign Exchange means currency transactions. Only in Indonesia is forex better known as forex or currency. Then what is forex trading?
If you are wondering what forex trading is, forex trading is an investment product that buys and sells foreign currencies. Buying and selling activities in the forex market, known as forex trading, offers attractive benefits. You might think that when you trade money at a money changer, it’s trading forex. However, the explanation is actually more complicated. Then what is forex trading and how is it different from exchanging foreign currencies?
What is forex trading? In general, Forex is a transaction in which you exchange the currency of your country of residence for the currency of the foreign country of your choice. In addition, forex needs are usually personal or private, one of which is a means of payment in other countries visited. So when you exchange money at a money changer, this activity can be called currency. At the same time, forex trading has other meanings.
What is forex trading? Forex trading is the buying and selling of foreign currencies, usually done online. The purpose of forex trading as an investment in itself is to benefit from the difference in sales figures. Generally those who trade forex are called traders.
What is forex trading and its risks as an investment?
As an investment vehicle, forex trading has its own risks and benefits. Before you start learning what forex trading is, it’s a good idea to understand the risk profile offered by either type of investment.
This is a big risk
Compared to other investment vehicles such as mutual funds, stocks and bonds, forex trading carries the highest level of risk. So what is forex trading and why is the risk so high? This high risk is due to the operating lever system. Leverage is a system that allows you to trade large amounts of Forex even with less capital. When you first learn to trade forex, you are usually introduced to this leverage system. An example of leverage is Ratio 1:100 This comparison shows that you can trade $100 Forex with only $1 capital. Of course, this system looks quite attractive. However, you should know that the profit you make can only be achieved by setting up this leverage system with the right ratio. If you choose the wrong strategy, you can lose up to $100 more.
Unpredictable currency movements
You may know that the comparison or movement of this currency can be described as very volatile. Before knowing what forex trading is, you must have a deep understanding of how foreign currencies move.
Many factors can affect currency movements in the forex market. In general, the value of foreign currencies varies due to economic factors, geopolitical factors, maybe even due to transactions made. If a lot of transactions are on purchases, this will definitely increase the exchange rate. On the other hand, if lots of people start selling their currency, it’s likely that its value will also go down. This forex trading insight continues with dynamic currency movements that will confuse you if you are not well informed and lead to big losses if you make a wrong move.
Lots of fraud
What is forex trading and how is it done? Forex trading is usually done online via the internet. The lack of face-to-face transactions certainly presents significant opportunities for fraud. This method of cheating is very versatile and leads to heavy losses. One of them is a fraudulent broker profile. If you use a broker to trade forex, make sure the broker is of good quality and has good credentials. If not, you can run away with your winnings. It also gives Forex trading a bad name as an investment vehicle.
Must be active full time
To avoid losses from fraudulent brokers, when you start forex trading, you must actively monitor the movement of your investment. Therefore, if you are trading forex as a side business, it is very difficult to earn extra income. You need to prepare a lot of time and thought and energy for forex trading, if you are a little careless, you will most likely experience losses. So, once you know what forex trading is, it is highly recommended that you fully commit to this investment vehicle.
If you know what forex trading is and the risks involved, you may be able to choose an investment product that offers lower risk and security, but is tailored to the risk profile of your financial goals. Or, you can try investing through mutual funds.
Mutual funds are investment vehicles consisting of funds managed as investment capital that can be converted or converted into various products such as stocks, bonds, and other financial and investment products. An Investment Manager is fully responsible for all fundraising. A portfolio manager is a fund or professional entity that is in charge of managing your investment activities, or those of you, including mutual funds. The advantages of investing in mutual funds, easy to understand with a smaller risk than the risks and understanding of forex trading, attract the attention of young or novice investors to start investing. However, the choice of investment instruments will be given to you according to the risk.
In short, once you understand what forex trading is and what mutual funds are, mutual funds are a suitable investment vehicle for those of you who want to start as a novice investor. You simply give or entrust your investment capital to the investment manager. Typically, these investment managers are managed and held by the portfolio. The people closest to you will later help you choose and buy the investment funds you want. After a successful business, increasing funds, as well as saving, all you have to do is pay attention to the movement and development of your investment. That is why mutual funds are suitable as investment products for beginners and those who don’t have enough time to manage investments independently.
CIMB Niaga is committed to helping customers invest and acting as an investment sales agent by distributing 69 products. This mutual fund product offers investment convenience for investors. Comfort and safety levels, as well as different maturity and risk options, can be attractive options for potential young investors who want to invest to prepare for the future. You can invest with capital that can be adjusted to your needs or circumstances. Manage investments with CIMB Niaga and enjoy the benefits here.
10 advice for novice traders
Every novice trader wants to be a successful trader. But many inexperienced traders lose a lot of money in a short period of time, usually because of one wrong move. This article provides some suggestions to prevent you from becoming one of these traders. Although these suggestions are not a guarantee that you will definitely become a successful trader, they can at least help you avoid losing money while trading. Here are 10 tips for novice traders to avoid huge losses and maximize your potential when trading stocks, forex or gold.
1. Trade with the right instruments
You have to choose what you want to trade. Act within your means and the risks you are willing to take. I am often contacted by people who want to learn options trading. When I asked if I knew stocks, the answer was I don’t know. That’s ridiculous. Even though options are a derivative of stocks. I don’t understand stocks, but you want to trade options now. It’s like wanting to learn boxing but wanting to fight a heavyweight champion. Safely insured. Many people are like that, want to trade forex, gold, indices now, but don’t know they can’t trade there yet. For beginners, it is recommended to trade stocks first, then with constant profits, you can switch to forex, then to gold, and then to indices. Beginners trading stocks also need to choose which stocks to trade. For beginners, it is recommended to trade blue stocks with relatively low volatility. If you are just a novice to stock trading, you will love trading baked stocks, so be prepared to make lots of deposits and rare withdrawals.
2. Get the right information before trading
Beginners need to broaden their knowledge before starting a business. People who start trading are usually too excited, they jump into action because they think trading is easy. Without proper knowledge it is like war without weapons. As a result, accounts only last as long as corn or less. Traders who don’t want to learn will pay dearly because they run out of trading capital. What is important is not only the information to look for, but information about the right way to act. Many beginners get completely lost when learning about trading. This also creates the wrong mindset when trading. According to him, trading is easy, trading is a way to get rich quick, trading is just analysis, etc. If you want to learn about the business, it is best to find a reputable source. It is recommended to read the trading guide for beginners
- Start with a small amount of money
One of the best tips for trading is to start with a small amount of money. With new acquisitions permanent profits are added. Big money doesn’t guarantee easier business. Whatever. If you are not good at trading, you will still run out of millions, billions or trillions. - Pay attention to business psychology
Many traders underestimate the psychological side of trading. Although unprotected emotions can destroy business results. Feelings of greed and fear greatly affect business. Many trades that go smoothly at first fail due to emotional factors. - Keep track of successes and failures
Look at the history of the business and see what can be improved. Successful traders usually keep logs, trading journals, from which they can find out exactly what is working and what is not. By using a journal, you identify weak points that need improvement. - Choose the best broker in your opinion
Choosing a broker is very important because many forex brokers in particular are scammers. Too bad I got fed up with trading, the broker took my money. Check the broker’s history, legality and registration location. After that, just check the offers and facilities. Is the software easy to use, complete and so on? Customize brokerage services to suit your trading style. - Is there a trading system
Traders should have a trading plan or trading system so they know when to enter and exit the market. As a result, these traders are not confused and not easily influenced by the market. He has confidence. The specific trading system must be complete, starting from analysis techniques, money management and risk. - Be realistic and use logic
Be realistic about business results. Don’t think about changing your lifestyle just yet. Unless you’re very lucky, don’t expect your $100 business capital to turn into $100,000 overnight. The real focus of the real business is survival. If you hope too high, you will only be disappointed, frustrated, hopeless and eventually fail. Think and be realistic from the start when you start trading (unless you get really, really lucky). Unfortunately no one is very lucky. 9. If it fails, try again in a better way
Becoming a successful entrepreneur is a development, requiring a long process and learning. Many business people fail before they succeed. If you fail, you just need to try harder. Use business and learning journals to improve business quality. Don’t make the same mistake. - Discipline and never give up
According to the trading system, traders must be disciplined while using it. Unfortunately, this doesn’t happen very often. The failure of a trader is usually due to not following a predetermined trading system. Mainly related to exit rules or limiting losses. Most traders don’t want to cut losses, resulting in huge losses. Investors will eventually end up on the brink or run out of money. Do you want to be a disciplined trader or an emotional trader?
5 Forex Apps Suitable for Beginners
Recently, Forex has become a very popular investment vehicle among many people. Apart from that, now there are many forex trading software that can be used to facilitate these activities.
Forex or currency is the activity of buying and selling foreign currencies from various countries. The benefits of investing in this one instrument are very interesting and growing rapidly.
In addition to the ability to start with small capital, Forex also has high liquidity, allowing investors to make purchases anytime, anywhere, including through applications. Then what programs are suitable for forex and guaranteed security?
It is very important not to be wrong in choosing a program that will be used for forex support activities. If we are not careful, it will cause results that are not optimal and there will be a greater possibility for greater losses. Therefore, as beginners, we highly recommend the following application.
The level of success is determined by the expertise and skills that each trader has, remember that this software is only helpful, not a determinant of your success, by prioritizing data and the convenience of this forex application, it will make it easier for you to become the best trader.
Here are 5 highly recommended forex applications!
- Trade Optimizer
- Agrodana Future News
- MetaTrader4
- NetDania Stock & Forex Trader
- HSB Trader
