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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Why operate in Forex?

Forex, also known as the forex market, is the "place" where you trade currencies. The global needs of governments, companies and people to exchange currencies is the main reason why Forex is the largest, most popular and liquid financial market on the planet.

Even though some of the reasons for trading Forex are evident from now on, let's start from the beginning.

Why operate in the financial markets?

"A basic freedom that we have in living in a capitalist country is that we are free to speculate on price movements, this freedom does not require any additional justification, such as promoting commercial interests." All that is needed is that the general public is not affected and the market is organized according to fair rules and procedures. "

-The Rosenthal Report, circa 1976.

Advantages of operating in Forex compared to other markets

Forex does not rest

New York, Tokyo and London ... Why Forex never sleeps?

Since governments, companies and people who need currency exchange services are scattered around the world, trading in the Forex market never stops. The activity in the Forex market basically follows the sun around the world. At any time of day or night you can find an active currency pair to operate.

The Forex market is open 24 hours, 5 and a half days a week. It is not possible to operate on weekends.

Why would someone operate Forex instead of other markets? This is because people with full-time jobs can only trade Forex before or after work and on Sunday evenings.

Long or short

Why is the Forex good for you? Because it works both ways.

In the time of investors like Mr. Dow, it was only possible to operate profitably in one direction: buying. Investors only acquired assets that in their opinion, would maintain or increase their value. Therefore, companies whose shares rose in price, apparently were better options from the point of view of business.

There was no way to generate returns through the sale of assets that were depreciating. The only thing that could be aspired to when selling shares that were losing their value was to stop the losses.

A century later, operators call the Forex market "the best in the world".

Now people can earn money when the market rises, falls or is in range. Regardless of whether there is a financial crisis, a weather emergency or the fall of a meteorite, Forex traders do not care.

Low transaction costs

It is worth mentioning some things related to the issue of low transaction costs.

First of all, most Forex accounts operate without commissions or with a minimum rate, and there are no exchange fees or data licenses. In the event that there are tariffs, it would be an added cost of the market maker. When there are no such rates, the cost of the transaction will be the difference between the purchase and sale prices (spread), which is always a function of market activity. Therefore, if you think that the USD / JPY spread is too high for you, try another market, such as corn.

Second, a low initial investment.

Do you want an account without needing a deposit? Surf the Internet for half an hour and you will surely find a place to open one. The barriers to entry are lower in Forex than in any other traditional financial market, which is one of the main reasons behind its accelerated and expansive growth. To have a reference, the SEC (Securities and Exchange Commission) requires a minimum balance of $ 25,000 in the trading account to operate in the stock market. Similarly, futures brokers ask customers to publish their margins and maintain a minimum balance in the account of a few thousand dollars to access and put operations in the market.

Finally, the trading program, the analysis tools and the price quotes are free for Forex traders, which does not happen in the same way for stock or futures traders.

Your Forex broker already paid for all these elements, which is another way to tell you: operate as much as you want.

The leverage

Leverage is another reason to trade Forex.

Some currency traders realize the miracle of financial leverage simply because they have never operated in another market. For example, if they operated with stocks, the maximum leverage that the broker would offer them would be 1: 2, while the maximum leverage of some Forex brokers is 1: 1000! Why is Forex trading so popular? Take a minute to focus on this reason.

Of course, such high leverage is another way to attract traders who can not make a $ 25,000 investment. This is possible only thanks to the great liquidity of this market.

High leverage allows traders with insignificant investments to trade with high volumes of currency and generate significant returns from the smallest market movements. However, there is also the possibility of incurring significant losses. It is important to understand that in itself, high leverage does not make trading more risky, but the large volume that can be operated thanks to it.

In the hands of a careful and knowledgeable operator, it is possible to operate safely in any account, even with high leverage.

Speaking of liquidity

The international exposure is the main reason for the famous Forex liquidity. As the world becomes increasingly globalized, investors look for opportunities anywhere. If you want to form a general opinion and invest in another country, Forex is a simple way to gain exposure, while avoiding problems such as foreign laws on securities and financial statements in other languages.

To free yourself from exorbitant figures that do not mean anything when taken out of context, we will only say that in the Forex market more is negotiated in a single day than in Japan in a whole year. Japan is the third largest economy in the world, of course. There is always a large number of people operating, although the majority of negotiations are concentrated in a few currencies (around 80% of all Forex transactions involve the US dollar). This makes it generally very easy to enter and exit transactions at any time, even at high volumes. Therefore, if you think the spread is too high or your operations take too long to execute, try another market, such as corn.

There is an important observation regarding why Forex trading is complicated and that it involves liquidity.

You may hear that many people talk about liquidity, the interbank market and the size of the Forex market as a non-negotiable advantage. However, these factors are relevant only from the institutional point of view of the industry, but they are not very important for the retail operator. It is important to remember that this class of operators works through Forex brokers. If the broker in question is a market maker, we only negotiate with him and your operations never reached the true interbank market.

Accessibility

It is possible to trade Forex from anywhere in the world as long as there is an Internet connection. You do not even need a broadband connection.

In addition, it is possible to open accounts after completing a simple form and passing a rudimentary identity check. Funds can be deposited on the same day the account is opened and operations can be carried out immediately afterwards. Actually, anyone with the desire to trade can enter the Forex market in less than 60 minutes after reading this phrase to the end.

Disadvantages of the Forex market

The disadvantages of operating in Forex are not so numerous, but it is important to take them into account, because they can outweigh the advantages if they are not paid attention.

An unpleasant detail

The biggest disadvantage of the Forex market is that all its benefits can easily be denied to an ignorant and inexperienced operator who enters the market without any discernment.

The Forex market is probably the least refined environment from the point of view of the operator, since it is very simple, cheap and promising. The bad reputation of the forex market precedes it and one of the first things that beginners wonder is if Forex is a scam and if it is actually possible to earn some money. The answer is that it is possible! How much of possible? It depends completely on the person and no one else!

Before you decide to trade in the forex market, you should carefully consider your investment goals, level of experience and risk appetite. Educate yourself, train yourself, invest your time and money, treat the Forex with seriousness and care, and the market will reward you in the end.

In summary, why would anyone operate Forex? Because financial trading is definitely something worth trying and what is worth to succeed. The Forex market is the easiest to take advantage of, but it is not the only one. If the Forex market does not attract your attention, do not despair and try the corn market.

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The good and bad of each type of MBA program

Money, time, family and work are the four cards that we must consider when we decide to take an MBA. The point is how we balance them to decide if we pursue a full time, part time or online MBA and whether or not we add a double degree.

While the full-time program is full-time, the part-time has face-to-face classes designed to attend after working hours . And while the online MBA is being studied via the web, double degree more than a type of MBA is a feature that can have a full time, part time or online. It refers to when the same program delivers degrees from two business schools, usually a local and an international one. What to decide? Next we review the pros and cons of each one.

Full time MBA

Advantages: it  is the main program among the different MBAs. It is designed for those who are able to leave their work to dedicate themselves to the program, even changing country. In this format, the classrooms are characterized by having students from different countries and cultures, so if you are looking cosmopolitan touch is the best option. In addition, generating this network of contacts opens the option to your foreign students to settle in the country after the MBA.

On the other hand, being full time allows you to focus completely on the program . Living with the peers, generating solid networks and achieving greater results. "In the full-time MBA, participation and commitment are incomparable," says Elaine Tavares, vice-dean of COPPEAD's full-time MBA.

Disadvantages:  if you have a family and a settled career it is difficult to stop working or change the lifestyle or the country of residence. Even more so if the period is one or two years. "The opportunity cost is very high and the return is not always positive," says Luis Silva, director of the ORT Uruguay MBA.

As for academics, the highly demanding of a program that leaves little time off and the inability to practice what is learned are the main difficulties. "The full time MBA does not allow the practice and rehearsal of the concepts learned in the real field ," confirms Aldo Aszyn, director of Latin America Finance Operations of The Coca-Cola Company and MBA of ORT Uruguay.

In addition, after the MBA the time lost in the labor market must be retaken and the speed or slowness of this will depend largely on external factors. "There may be difficulty in retaking professional development if the labor market is stagnant," explains Sonia Zurita, academic director of the ESPAE-ESPOL MBA.

MBA  part time

Advantages:  the part-time MBA is taken for two or three years, with face-to-face classes that are held after working hours and during weekends. Therefore, it allows you to continue with your own career, something especially valuable for professionals in important positions who do not wish to leave . "They are the best option for consolidated professionals," says Marcelo Véjar, an MBA student at Adolfo Ibáñez University. In addition, by combining studies and the labor market, it allows to develop the tools that the program delivers in the work environment itself. Added to this is bringing real challenges to the MBA, enriching the debate.

Disadvantages : sometimes in the labor market it is considered less competitive than a full time. "The participation and commitment of the students are not the same as those found in a full-time program," says Tavares, of COPPEAD. In addition, dividing the time between work, MBA and family can collapse some students. "In a part-time MBA the participant's attention must be shared, which has a negative impact on learning," says Luis Silva, director of the ORT Uruguay MBA.

MBA   online

Advantages:  online MBAs are conducted remotely, without having to travel and are flexible in their schedule. "The online MBA can be interesting for someone who is not able to go to a classroom, someone who for example does not have flexibility in their work," says Elaine Tavares, COPPEAD. In addition, with the rise of distance work, studying online is increasingly less remote from a real work environment and provides more facilities than a full time or part time to continue with daily activities. "It motivates the use of different communication and collaboration schemes, which are necessary in a world where physical distances are no longer important," says Sonia Zurita, academic director of the ESPAE-ESPOL MBA.

It is also effective for students who want to obtain specific competences, without all the networking attributes of a face-to-face MBA. " It is valid for those who are looking for some concrete tools to apply in their companies, but who are not very interested in the study process , or in the final value of the degree," says Daniel Budasoff, MBA from Universidad Torcuato Di Tella.

Disadvantages:  studying online requires a high organization of times so as not to lose the rhythm or leave the course. In addition, this format lacks one of the most valued aspects of an MBA in the long term: the experience of sharing directly with other students and directly generating contact networks. " Concepts are learned, but the behavioral perspective is lost, " says Tavares, of COPPEAD. "Because the interaction with students and teachers does not come close to what happens in a regular course," he adds. Another problem is that their social validation is still very low compared to a full time or part time MBA, in addition to the teacher-student relationship is more distant.

Double Degree

Advantages:  it refers to the same MBA that allows having a degree from two business schools, usually a local and an international one. Therefore, it allows generating extensive contact networks. "They are an excellent alternative, since in my case it allowed me to generate a network of contacts not only locally but also globally," says Cecilia Hernández, who is currently pursuing an MBA at ORT Uruguay and a Master in International Business at Florida International University. , through a double degree program. Hernández's case exemplifies how a double degree program does not necessarily mean obtaining two MBAs, but can include a master's degree added to the MBA.

In addition, having the name of the two schools in the curriculum is also a double letter of introduction. This, in addition to the advantage of having complementary subjects between both programs. "It can give access to skills that might not be in the local market," says Salvador Córdova, MBA from EGADE. Another advantage is that they can include experiences of international exchange , allowing us to know different cultures without the wear and tear of traveling full time

Disadvantages: it  can happen that the title that is added to the MBA is that of a school without an important prestige. "It is essential that before a double degree in itself, the student is set on the quality and reputation of the international body , " says Jorge Tarziján, full professor at the Catholic University of Chile. "A double title of a not great prestige makes no difference, but it can become a negative sign for the student , " adds Tarziján.

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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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