Let’s Get To Know The Character Of Trading With The Risks – We must know and recognize the character and risks of the trading system so that we are exposed to risk before knowing it because it is very important to know
Trading or other language of this trade is an activity by exchanging goods or services based on mutual agreement. However, the trading term that we discuss this time is trading using forex instruments. For more details, you can understand through the article below. However, before that, please note that many people have traded with GIC by earning daily profits by downloading the GICTrade application on the Play Store and App Store.
Definition of Trading
In accordance with the name itself, in English terms, trade itself has the meaning of exchanging, or exchanging activities both goods and services from one party to another. This trading activity, in the past has been known as barter, which is the activity of exchanging goods without an official medium of exchange. Until the discovery of a medium of exchange that already has standardization, namely in the form of currency. And now, this activity continues to grow to become a money market or capital market.
Trading has become a term that is often used by people in the world of capital markets and forex, where these activities are like conventional trading activities in general which have the same function to be able to find a profit from these activities. In order to obtain a profit in question, the perpetrators of trading activities, referred to as investors or traders, must be able to work alone in order to get the target of the desired profit.
Hearing the word “Forex” itself, maybe for some people the term is a foreign term when heard. So it’s natural that you feel foreign to this, because this term is known to be more closely related to people who have become quite experienced in the investment and trading world. Forex or the abbreviation of Foreign Exchange has a meaning, namely as a transaction of foreign currency. In Indonesia itself, forex is better known as foreign exchange or foreign exchange. Then, what is meant by forex trading?
Forex trading itself is an investment product by conducting buying and selling activities using foreign currencies. The activity of buying and selling foreign exchange, known as forex trading, will offer a variety of attractive advantages. Maybe you will think that when you exchange money to a money changer, it is an activity that can also be called forex trading. However, the explanation itself is not in that sense.
What is forex trading? Forex trading is an activity to buy and sell foreign currencies which will usually be done online or online. The purpose of forex trading when viewed as an investment in itself is to seek a profit from the difference in numbers on the sale that is being made. Usually those who are doing forex trading activities can be known as a trader.
We already know the definition of trading, so then you can start consulting trading through trader assessment with GIC experts.
In contrast to investment activities which will be passive, in trading itself usually an investor must be able to move more actively. Because trading activity itself is a type of short-term investment, if you are not good at managing the instruments being traded, the investor or trader can lose money in sufficient or even very large amounts. So in that case, investors themselves must be able to go deeper and also understand the nature of forex trading, strategies, and various other factors that can affect an existing profitability.
Some of the important characteristics of trading are as follows:
Trading often involves buying and selling commodities, currencies, or other securities. Regular trading helps take advantage of fluctuations in the market. In general, traders buy low and sell high when the market has reached its maturity and is on the verge of falling. Buying and selling frequently is a way to earn high profits.
Some financial advisors and trading institutions advise against frequent trading. By trading frequently, traders can increase their buying and selling costs. This, in turn, reduces the overall return. This is one of the most important trading features.
Short Term Profit
Trading helps to earn short term profits by taking advantage of volatility through buying and selling. Even a small amount of volatility can give high returns. These short-term gains help meet short-term goals while meeting current needs. In addition, short-term gains increase the available corpus over a longer period.
In theory, arbitrage gains (short-term gains) may seem possible, but are practically impossible.
Short Term Approach
Trading has a short term approach. This approach can be very profitable, but it can also be risky. The investment period can be as short as a few minutes in trading. Investments are made when the market is low and sales are made as soon as the market rises even a little.
To succeed in this approach, the trader must understand the risks and benefits of each trade. In addition, they must know how to find good short-term opportunities and how to protect themselves. Some of the basic steps to follow are observing moving averages, understanding overall cycles or patterns, and understanding market trends.
In trading, full focus is given to the short-term aspects. Trading is short term, and therefore the focus is also on short term opportunities. Trading focuses on knowing the short-term trend of the price movement of the underlying asset. These short-term price movement trends can be analyzed and sometimes predicted. Thus, profits can be made by focusing on short-term trends in price movements.
The focus should be on the trading process and not the trading results. The overall trading result is the end game, that is, the overall result should focus on the trade. A trader must look at the big picture, which is the hallmark of a successful trader.
Technical analysis predicts future financial price movements based on the study of past price movements. Technical analysis does not produce absolute predictions. On the other hand, technical analysis can help investors anticipate what “may” happen to prices over time. Technical analysis uses a variety of charts that show prices over time. This is one of the main characteristics of the Indian market, which most of the traders follow.
Technical analysis is an important part of trading. Technical analysis provides the entire basis for making decisions about trading. For this, charts and graphs are widely used. Charts and charts help to understand various patterns, trends, etc., based on which trading decisions depend. Technical analysis also provides information about how an investment instrument has performed in the past, about how it is currently being applied, and about its prospects in the future.
Before proceeding to the risk of forex trading, be sure to invite friends or become an IB Affiliate to get various bonuses for every time you increase your IB level.
Risks of Trading Forex as an Investment Medium?
As an investment instrument, apart from offering various kinds of benefits, forex trading itself also has risks in its use. The following is a risk profile that will be offered by this form of forex trading investment.
Have high risk
When compared to other investment instruments such as mutual funds, stocks, and bonds, forex trading itself has the highest risk to do. So, what is forex trading and why does forex have a high risk? This high risk occurs due to the existence of a leverage system in its activities. Leverage itself is a system that can allow you to make transactions with large amounts of forex investments even though you have less capital.
When you start learning how to invest in forex, you will usually be introduced to this leverage system for the first time. As an illustration of leverage, there will be a ratio of 1:100. This comparison indicates that, with only 1 dollar, you can carry out a forex trading activity worth 100 dollars. Of course this system looks quite tempting. However, you also need to know that the benefits that you get can only be achieved if you set the leverage system with the correct ratio. If you take this strategy wrong, you might end up losing up to 100 dollars more.
Unpredictable currency movements
This currency has a comparison or movement that can be said to be very volatile. Many factors can affect the movement of foreign currencies in the forex market. Usually the value of this foreign currency will change based on economic factors, geopolitical factors, or it could also occur due to the transaction factors that are currently being carried out. If there are many transaction values in a purchase, of course it can make the value of the currency increase. On the other hand, if more people start selling the currency they currently have, then there is a possibility that the value will also go down.
Lots of scams
This forex trading will usually be run online via the internet. The lack of face-to-face transactions can certainly present a high possibility of fraud. The mode of this fraud becomes quite diverse and will present a very large loss. One of them is the profile of a fraudulent broker. If you use the services of a broker to be able to make forex investments, then also make sure that the broker is indeed very qualified and has good references. If you don’t, the profits you get will be taken away by the broker. This can also cause forex trading itself to have a bad reputation as an investment instrument.
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Need to be active full-time
In order to avoid losses due to fraudulent brokers, when you start trading forex, it’s a good idea for you to be actively involved in full to be able to monitor the movement of your investment. Therefore, it will be very difficult if you make this forex investment as a side activity to be able to have additional income. You also have to prepare a large enough time and mind in doing forex trading activities, if you are a little careless it will be very possible for you to experience a loss. Therefore, after knowing what forex trading is, it would be highly recommended for you to be fully committed to the instruments on this one investment.
After knowing the trading risks, don’t forget to do a preliminary test and find out your trading talent through the test!
Before Trading, What Steps To Take?
Just understanding a theory is certainly not enough to be able to jump straight into the world of trading itself, before you can enter the world of trading, you can try to learn trading using a demo account first. On the demo account, you can try various strategies and risk management without losing the money you have because the demo account already has a balance for you to do a trading simulation. Don’t forget, you have to prepare some trading capital by considering how much money you can afford to trade. Also make sure the funds that you will use for trading are not to meet daily needs.
If these two things are ready, then you can continue trading forex by opening a real-time trading account at a trusted forex broker and starting to deposit the capital you have into your trading account. If you are looking for a trusted forex trading platform, then you can join GIC. Which many traders have joined us and get various bonuses and other benefits. For the benefits that can be obtained from trading itself, what you can get and do is, if the price is increasing after making a purchase transaction, or if the price is decreasing after making a selling transaction.
After knowing what forex trading is, its characteristics, and also the risks, maybe you can choose an investment product that will also offer security and less risk, but of course it will be adjusted to the risk profile of your financial goals. As an alternative, you can also try to start investing by trading forex together with GIC.
In short, forex is a suitable instrument as an investment instrument for those of you who want to start an investment as a novice investor, you can register with the related broker. Then the related party will later assist you in filling out the existing requirements and start filling the balance. After successfully carrying out the transaction, then you only need to pay attention to the movement and development of your trading while adding funds. Also make sure you have a good trading plan in order to get maximum profit. Therefore, forex trading will be very suitable as a short-term trading instrument. However, also make sure you are not in a hurry to make decisions in trading in order to generate maximum profit. If you are still not confident with the trading plan that you made, then you can copy the trades provided by GIC by following the masters at GIC.
Committed to assisting customers in trading, GICTrade acts as the first revolutionary peer to peer trading platform in Indonesia based on 2 advanced technologies MetaTrader 5 and Blockchain. There are various kinds of instruments offered by GIC, such as forex, commodities, and gold. In addition, enjoy various key features of the GICTrade application such as GIC Signal, GIC Trade, GIC Affiliate, GIC Bridge, GIC Academy, and GIC Social Trade. With these features, it will make it easier for customers to trade. Plus there are free trading signals that you can get through the GICTrade application to prepare trading steps and how to take them. You can trade with a relatively small capital of at least IDR 3,000,000. Let’s trade forex with GIC and enjoy various benefits and bonuses! Don’t forget to fill out the GIC internal survey for an even better GIC.