Theory Of Economic Cycle

What is Forex Investment Trading? - TradeVestment.

Forex Trading is the largest trading activity on the globe with volume of around 1.9 trillion dollars a day.

Is trading the only option with Forex?

Can Investment be done in Forex?By definition, Investment means “money that is invested with an expectation of profit”.Usually, investment is done in industries like real estate, stocks, bonds, bank deposits etc. However, pure investment in forex is, to hold actual currency account.

Pure investment in currency is not profitable by itself as currency returns do not justify investment over a longer period of time. This makes Pure investment in currency an uneconomical investment.

The only available option to investor is investing currency in either of the avenues like deposits, bonds, fund market, equity, real estate, etc. depending upon the trader’s risk bearing capacity and the period of time.

Forex Trading is buying and selling of currency through a broker or institution without any physical settlement. Forex trading involves no commission and the whole forex trading industry works on spreads between buy and sell rate. Therefore, Forex Investments requires high investment and longer period of time to make it profitable.

Forex Trading business is quick, efficient and flexible as on an average, leverage available to trader is 1:100.
Traders usually work on Risk:Reward ratio. As soon they realize their profit the traders exit, and stop out as soon as their risk bearing capacity is exhausted.

As discussed in our previous articles, in order to be a successful trader in forex, one has to have all the pre-requisites.

Managed TradeVestments Program MTP

This strategy is a combination of Trading and Investment without actually holding the currency. ForexMetrics has developed a strategy which holds on fundamentally sound positions for a longer period of time as Investments.

How Forex Metrics “Managed TradeVestments Program” MTP works:

MTP applies Fundamental, Technical and Statistical Tools to run program on a continuous basis.

MTP recommends the following pre-requisites:

* Leverage used would be close to 1:10 as positions may be carried forward for a longer period of time and loss bearing and risk taking capacity required is high.

* TradeVestment Strategy is a long term planned activity recommended for minimum one year.

* Fundamental research is done in both economies of the currency pair to establish the short, medium and long term trend.

* Trend is determined using various time frames to evaluate the entry point.

* Technical Indicators are used to place an entry and exit order.

* Once the objective is reached, the position is closed.

* If position is negative, fundamental analysis and technical analysis of the pair is to be confirmed and depending upon the analysis, the position is either Hedged or Averaged or stopped out.

* Since we apply Statistical Tools also, Trading and Investment is an on going basis.

* Many times the equity draw down is substantially high and exiting at that level may cause high losses. Hence, the time frame for investment is planned for a longer period of time.

* MTP is a conservative program and keeps an objective of achieving an average of 20% plus returns per annum.