Forex and Cryptocurrencies

The currency market (Forex) is the largest market in the world and has the highest liquidity. It is not a limited market, since it operates 24 hours a day, 7 days a week, all over the world. Cryptocurrencies, especially Bitcoin, bring a new dimension and dynamics to the currency markets.

Standard Forex

First, here is an example of how standard currency trading works. Imagine that you are an American merchant betting on the pair sterling / US dollar ( GBP / USD ). You deposit $ 100 with your broker. Assuming the rate of $ 1 = £ 0.5, you would then receive £ 50 for your $ 100. If the GBP / USD rate changes to 0.45, and vd closes the position to 50 / 0.45 = $ 111.11. That is, you make a profit of 11.11% on your initial deposit of $ 100.

Forex with Bitcoin

Now, let's move on to an example of a currency trading using bitcoin. First, a forex trading account is opened with a broker who accepts bitcoins (such as AvaTrade, eToro, Libertex or Liteforex). Next, deposit 1 bitcoin from your digital portfolio to the digital portfolio of the currency broker. Assuming that the current bitcoin at the dollar rate is 1 bitcoin = $ 4000, your deposit of one bitcoin is equal to $ 4,000. Now, assume you want to take a position in sterling. If the exchange rate is £ 0.5 = $ 1, you will receive £ 8,000. After some time, the GBP / USD exchange rate goes to 0.45, and you close your position to get $ 4,444.44 in your account. You have a benefit of 11.11% that you can withdraw at any time. However, let's suppose that at this moment bitcoin at the rate of the US dollar. changed to 1 bitcoin = $ 3,800. When you withdraw your money in bitcoins, you receive ($ 4,444.44 / $ 3,800) = 1,169 bitcoins.

Even though the Bitcoin price has fallen ($ 4,000 to $ 3,800), the profit obtained in the GBP / USD part of the transaction has compensated for this loss, allowing us to obtain a profit margin of 0.169 BTC. This would be taking into account a hypothetical fall of the BTC / USD pair, but in the case that this pair had increased suppose to $ 4,200, we would receive ($ 4,444.44 / $ 4,200) = 1,058 bitcoins. Therefore, our profit in BTC would be lower, but it would be constant in USD, since the difference in values ​​($ 4,000 vs $ 4,200) in the BTC / USD pair would make this benefit identical.

Beyond fluctuations in the exchange rate that affect profit and loss, there are other benefits and risks to consider before trading bitcoin in Forex markets.

Advantages of trading Forex with Bitcoin

• Decentralized valuations : An important advantage of trading currencies with bitcoin is that there is no central bank to randomly change bitcoin valuations. Due to its decentralized nature, bitcoin rates are free of geopolitical influence, as well as macroeconomic issues such as inflation or the specific interest rates of each country.
• High leverage : Most forex brokers offer a high level of leverage that can reach up to 1: 1000 for bitcoin operations. Experienced traders can use this to their advantage. However, these high margins must also be approached with great caution as they also increase the potential for loss. Unless you are an experienced investor, we do not recommend that you use leverage.
• No transaction costs : All bitcoin transactions are digitally registered on public networks without any involvement of banks or clearing agencies. Therefore, there are usually no transaction costs involved in bitcoin, even for global transfers. Brokers pass these benefits to customers by not imposing any deposit or withdrawal fees for bitcoin transactions. This improves business profits.
• Low deposit amount : One can start with as little as $ 25 with some bitcoin currency trading firms. As promotional offers, some forex trading firms even offer new members a small amount as an initial deposit to encourage them to use their services. One thing to always keep in mind is to check that all brokers are properly regulated.
• Low cost of trade : Most forex brokers that accept cryptocurrency are keeping brokerage costs too low to attract new bitcoin-trading customers.
• Security : With bitcoin transactions, you do not need to reveal your bank account or your credit card information to deposit or withdraw money. Especially when it comes to foreign brokers, this is a great advantage in terms of cost and financial security.
• Without global borders : Bitcoin transactions have eliminated global limits. Using Bitcoin, an African-based trader can trade forex through a broker based in the United Kingdom. Regulatory challenges may remain a concern, but if both traders and brokers are willing to make transactions, all geographic boundaries are eliminated.

Risks of Forex Trading with Bitcoin

• The value of Bitcoin in the different exchange houses (Exchanges) is not uniform, and the exchange rates vary. You must make sure you know the bitcoin exchange rates that the currency broker will use.
• While receiving bitcoin deposits from customers, almost all brokers sell bitcoins instantly and keep the deposit in US dollars. Even if a trader does not take a currency trading position immediately after the deposit, he or she is still exposed to the USD / BTC exchange risk when withdrawing their deposit.
• Historically, bitcoin prices have shown high volatility. In the absence of regulations, volatility can be used by unregulated brokers to their advantage and to the disadvantage of the trader. For example, suppose the intraday bitcoin rate fluctuates from $ 4,000 to $ 4,300 per bitcoin. For an incoming deposit of 2 bitcoins, the unregulated broker may apply the lowest rates of $ 4,000. However, once you want to make a refund, the broker can use the highest exchange rate and instead of the original bitcoins deposited, only receives 0.93 bitcoins ($ 4,000 / $ 4300 = 0.9302 bitcoins). In fact, the unregulated broker may be exchanging bitcoins and dollars at 4,150 at the expense of his client and thus obtaining an additional benefit.
• The deposited bitcoins are prone to theft by piracy, even from the digital wallet of the broker. To reduce this risk, look for brokers who have theft insurance protection.
• High leverage is risky for novice traders who can not understand the exposure.
• Cryptocurrencies are a different kind of asset and have their own valuation mechanism. Currency trading with bitcoins essentially introduces a new intermediate currency that can impact profits and losses in unexpected ways. Any money that is not locked in a trader's base currency is a risk.

Verdict

Cryptocurrencies, including Bitcoin, are a new Forex trading tool, thanks to their volatility and usage advantages, they are making these one of the new investment instruments.

With an increasingly mature market and a growing popularity, we find a new investment tool to consider.

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Forex and Ludopathy: The Dangers Behind the Computer

The impersonal character and the anonymity present in most of the online platforms, suggests the ideal space to take from the people many behaviors that, in everyday life, would not be easily given; hiding in false identities or using resources that in the life outside the web would not appear, the online instances have that dose of penumbra that for many is extremely attractive.

The case of online Forex is similar: there are no faces, the money that runs is not tangible (although it does exist) and the decisions are not made out loud or through any conduct that requires the use of numerous skills of the person but only with one click This allows the forex market, in addition to being a financial space, to become the perfect niche for gambling personalities to develop at ease, without many noticing.

An expanding disorder

The increasingly indiscriminate opening of casinos in the world, both physical and online, has opened the way for previously considered "strange" disorders to appear now with high prevalence surpassing their historical levels. And in spite of the fact that in many countries there are regulations that give gamblers the possibility of self-exile from betting sites, the truth is that this is only a matter of will rather than imposition.

Forex , recognized as the market that moves the most money in the world, not only allows thousands of serious investors who make their careers there or simply supplement their profits with those they obtain from their formal jobs, but it is also a completely tempting instance so that, hiding behind business conduct, the gambling personalities take out their most hidden face.

Classical behaviors associated with pathological gambling, are often seen in the coin market: use of external resources to continue in the system (financial assistance from third parties to continue investing), revanchism (where each movement is an opportunity to recover what is lost ) and the loss of control (not knowing the limits to where it is possible to risk) are just some of the behaviors that are also presented in platforms such as Forex .

The advice of the experts

Warning that the currency market, as it can be a niche that allows juicy dividends to those who invest their capital there, can also become a real nightmare if you do not have certain safeguards suggested by experts in the field.

Regardless of whether it is an anonymous person who is immersed for the first time in the business world or if there is talk of a great entrepreneur with a lot of experience in the financial environment, the Forex qualities demand that the first step, even before knowing the reverse and to the right the online platform of this market, is to reach an absolute self-knowledge.

Understanding what are the typical emotions of each one, understanding that there are clear limits and that every moment is an instance for learning, are vital elements if what is pursued is success. This will avoid falling into unhealthy behaviors that eventually end up destroying not only financially whoever invests their money in the foreign currency market.

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Forex, an opportunity to invest from home

Know what this financial activity consists of and what you should keep in mind if you want to enter this market. 

Every day more people are interested in making online investments. And this, not only because of the ease offered by the new platforms to do so, but also because of the profitability it generates for users. 

In addition to trading, which consists of trading or speculating in financial markets, there is a new trend that is moving and is the Forex. 

Forex is the acronym for Foreign Exchange, which is also known as the currency market. To be a little clearer, this activity involves buying and selling coins worldwide. 

According to Marcelo Granada, Forex analyst, this market is decentralized, which means that the operations do not happen in a single part, but on the contrary in the whole world at the same time Thousands of transactions are being made. 

"For example, a central bank can do business with another central bank. Meanwhile the Bank of the Republic makes a negotiation with Bancolombia, and on the other hand, I am buying dollars in a house of exchange. This means that everywhere business happens at all times, "explains Granada. 

Another characteristic of this market is that it is fluctuating and its prices vary from point to point. An example of this is the Market Representative Rates (TRM) since these change according to the country in which it is being negotiated. 

Finally, it is also highlighted that Forex is a 24-hour market, that is, all the currencies of the world are fluctuating all this time. 

HOW IS FOREX MADE?

As well as trading, the Forex is carried out through a platform that allows investors to know what the interbank prices of the different global markets or the Central Banks are. 

Why, that whoever makes this type of transaction has access to the best market prices and take advantage of fluctuations. "Let's say that the dollar will be higher, for example, because the interest rates in the United Kingdom after ten years rose again. In this panorama we analyze that news, and what we could do is to invest downwards in pound sterling or buy dollars with sterling, which is the same, and we earn everything that the currency goes down, "explains Granada. 

To make this movement it is necessary to take into account three key concepts.The first is the parities: and this is the confrontation between coins , one that is the foundation and another is being negotiated on. 

This indicates the relationship that exists between the two currencies, that is, what must be delivered from one to receive a unit of the other currency. 

The next concept is the broker: this is a financial entity or institution that organizes transactions between a buyer and a seller; It is also essential to perform the movements since it is the entity that will open the doors to the foreign exchange market. 

In these, anyone with 100 dollars or more can enter their money and this, in the case of Forex,It will give you an operation platform where you can see the graphs, read news and the processes of your transaction. 

"The broker what he does is give one the technology so that one makes trading and this one earns a small commission known as a spread," says Granada. 

And here we come to the third concept that must be taken into account when entering the world of Forex. The spread is the difference between the purchase value and the sale value of a currency. This amount is what is given to the broker for each transaction that is made. 

TIME

Marcelo Granada also mentions that Forex transactions can be very short-term (minutes and hours) or long-term (days, weeks or months). Additional notes that the time a person must invest to track their investments is inversely proportional to the delay of transactions. 

"That depends a lot if the person wants to make short-term, five-minute or one-hour transactions. For these cases, a lot of time must be devoted, because one must be attentive to the screen to know, for example, when to leave, "explains Granada. 

Contrary to this, if the movements have a delay of one week, you can spend an hour a day. "Even so, you always have to spend time. It's a job and you can not invest and leave things without a follow-up, "says Granada.

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Psychological aspects necessary to operate in the Forex market

One of the most important aspects and at the same time most ignored by traders is maintaining a healthy psychological perspective with respect to trading. The psychology of trading together with risk management is one of the pillars on which professional traders base their success in the market. In fact, investors who are not able to control the stress produced by market variations will not survive as long-term traders, no matter how skilled they are or their knowledge of market analysis tools.

Emotion-free trading

It is essential that the trader make his decisions regarding the market based on objective strategies in such a way that eliminates the interference of emotions such as greed and fear whose effects can be fatal because they cause the person to make bad decisions. One of the characteristics common to all professional traders is that they can achieve a complete emotional detachment with respect to their transactions: although they are involved and dedicated in their operations in the market, they do not reach the point of committing themselves emotionally to them, that's why they accept No hassle losses and they make all their investment decisions in a completely objective manner.

Frequently, traders who become emotionally involved with their transactions often make important mistakes because they tend to change their strategy capriciously in the face of a few losses or on the contrary become very careless and overconfident after getting a few. winning operations. A successful trader is one who has emotional balance and who bases all his decisions on an objective strategy that applies in a disciplined and emotion-free manner such as greed and fear.

The professional trader knows when he should take a break

When a trader suffers an important losing streak, he should consider taking a rest period from trading before fear and greed come to dominate his trading strategy and drive his decisions. It is important to understand that not all transactions will produce benefits. Therefore, the trader must be psychologically capable of understanding that at some point he will have loss which he must manage properly.

The vast majority of traders, even the most successful, at certain times go through periods of losing trades. This is not unusual. Therefore, the key to becoming a long-term winning trader is to have the ability to overcome a losing streak without being disturbed. At the moment in which a trader goes through a negative streak in which he experiences great losses, it is probably best to take a break from trading.

Normally, staying a few days or even weeks without observing the market allows you to clear your mind and may be one of the best solutions to a losing streak. On the contrary, continuing to perform non-stop operations during a complicated market condition can not only produce high losses but also affect the psychological state of the trader.

Finally, it is always better for the trader to recognize his losses instead of continuing to fight against them and acting as if they did not exist. It is vital that the trader understands that no matter how much he prepares and practices, during his career in the market there will be many losing trades. The key to success is to make these losses so small that the trader keeps enough capital in his account so that he can operate another day in the market and can leave his winning transactions open for longer.

The fact is that a trader can overcome any losing streak with proper monetary management techniques . This is the reason why the experts emphasize the use of a 2: 1 risk to profit ratio in their operations, as well as not risking more than 2% of the capital of their account in a single transaction. With these practices the losses can be maintained at an acceptable level.

For traders that operate in the Forex market or with other instruments such as shares or Futures, the following are 10 basic rules that every trader should follow:

• Let your profits run.
• Limit your losses as much as possible.
• Do not fight against the trend.
• Hold positions with an appropriate size according to the capital of your trading account (monetary management).
• Apply an adequate benefit-risk ratio.
• Do not add to the losing positions to compensate, on the contrary if a position is generating excessive losses close it.
• Analyze and take into account the real expectations of the market.
• Capitalize appropriately on your profits, do not allow a winning operation to lose a high percentage of the potential profits produced or end up causing losses.
• Use a trading booklet and learn from your mistakes.
• Set a maximum loss or recession level for your earnings. If you reach this point, consider resting and staying away from the market for a few days.

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Is It Possible To Live Forex?

There is no market that attracts more willing investors to live trading than the Forex. I like many investors I wonder Is it possible to live Forex? , I imagine if possible, although I do not know if this will be possible directly or indirectly. Let me explain: 

Many traders who invest in Forex or other markets, not only do Trading, they also sell their trading ideas or their knowledge, to complete their income. That for me that is live Forex, but not live trading. 

A day traders love the Forex, simply because the Forex is a market that works 5 days a week for 24 hours, for all who aspire to live Forex, or live trading, this idea sounds like celestial music: practically uninterrupted possibility of being able to do operations in the market. 

There are many Forex traders who claim that it is possible to live Forex, the problem is that the market usually devours most small investors before being minimally profitable. After three years, few investors from which they started are still trading , this is proof of how difficult it is to achieve profitability. 

As an investor I believe and affirm, that you can make money with the Forex , or with any other financial asset, but the really difficult thing is to live Forex or Trading in general.

I am skeptical by nature and somewhat suspicious, because the traders who are supposed to be profitable and have managed to live the forex are the ones that also sell us something: whether trading courses, trading signals, books, etc. 

Come on ... I know a few traders who claim to be profitable within the Forex or Day Trading in general and also do not want to sell me something. It may be that at some point they want to share their knowledge, if it is true that many of those who invest in markets, feel a little indebted to all who have taught them something, and teaching is part of share something gained, but ... you can expose the knowledge for free, 

Leave a stable job, to live Forex

One of the great motivations that have those who want to live Forex, is to leave a job that they are not passionate about and in which they are trapped. 

Trading offers promises of freedom, which can not be given any other activity. 

You can trade in Forex from anywhere in the world , you just need an Internet connection and an Online Broker to operate, that simple and easy. 

Such a wonderful life, near a paradisiac beach, on the edge of a swimming pool or doing cultural tourism around the world, is what the Trading industry really sells to us. 

True, we could live like this. In theory everything is possible, but you have to know that the reality is much harder, at least reconsider enough, before leaving a stable job.

What do we really need to live Forex?

If I had to demand two fundamental premises, in order to live Forex, I would say that the essential would be:

Be profitable on a regular basis

Let's overlook all that is training. If we want to live Forex, we must have passed the knowledge stage, it is necessary to be in possession of the necessary knowledge to operate: technical analysis, fundamental, psychological control, Trading systems, risk management, capital management ...

All these knowledge can and should be had, but with knowledge alone is not enough. 

You have to be profitable on a recurring basis. 

And I'm not referring to one month earning money and another not. Invoices arrive every month. 

Every month you have to pay for water, electricity, telephone, housing and you have to eat. 

You have to be profitable, andthat profitability has to be sufficient enough to cover our needs . And this leads me to the second premise:

Have a Proper Trading Account

The best investors in the world, speak of annualized returns of 20% . How much is an annualized return of 20%, translated to profitability-month? 

Do not try, if your profitability a month, is 2%, you would need to be in the disposal of an account of 100,000 €, to get 2,000 € month. 

I will not go into details, because Trading in Forex, is a very leveraged Trading . The accounts are on the margin, and you may be able to get higher returns, even starting from smaller accounts. Although the danger of leverage is in forcing the machinery, and we end up bursting in the face.

Forex live is more work

If you decide to live Forex, in the end you will be a more salaried, but with the problems that all the autonomous. 

When you depend on yourself, your effort and profitability, you can find that there are really complicated situations: that you are sick, that you do not have access to the Internet (if you travel), that the market changes and your profitability goes down. 

There are so many problems that you can find, that I understand those traders who decide to supplement their trading income, with additional ones. 

Living Forex can be exciting , but it does not have to be easy.

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