Introduction To Investment

Real sector investment (property for example) generally requires a large capital and takes a relatively long time to develop because of the magnitude of the capital thus liquidity is not as fast as the financial sector.

Take the example of when we are buying a House for investment. The extended value is usually never decreases and is always increasing. But on the other hand, after a few years, you want to withdraw your investment, then you need to find someone who has enough funds to buy a House whose value You might have gone up in tens to hundreds of percent. Looking for buyers who like this is not easy, this liquidity problems occur.

Another case with the financial sector. Investments in this sector have a tendency more liquid and return to the relatively larger, proportional to the risk. Another plus was the large number of investment products offered in this sector.

Where the position of Forex Trading? In the money market Futures Commodity Exchange &. Forex trading is an investment in the financial sector which belongs to the most high risk-high return investment. That is, the opportunity to earn huge profits even can reach hundreds of per cent per month but is offset by the likelihood of heavy losses if not managed properly.

You need to understand the concept of high risk-high return here. Basically, all types of investment have likely losers. The magnitude of the potential loss will be proportional to the magnitude of the potential gains we can get here. The greater the potential gains that can be obtained here, then the greater the potential losses which can also arise and vice versa.

If you considered the safe investor who doesn't like risk or ' shock-shock ' in your investment portfolio, then it appears that forex trading is not a type of investment that suits you. This is because the forex trading is an investment that has a very rapid movements in the liquidity and price movements. Logically, forex trading can only bring you earn a profit of tens to hundreds of percent in a single day, but can also bring you lose the same amount.

If you are a risk taker, the forex trading is a type of investment that fits with you, in the sense of to earn huge profits, then he was ready to bear the potential loss of the same magnitude.

Then is there any way minimize the potential losses are there? Of course there is! Risk management and the capability of your analysis is the key here. The better you in undertaking risk management and analyze the movement of the market price, then the smaller the potential loss that may occur. It's all proportional.