A hard reality of our current situation is that at the time of writing this article, if you did a dollar conversion of your salary in Ghana as of January 2022, it’s safe to say you’ve been hit with a 50% salary cut, if not more; and it won’t stop there. Troubled? You should be.
If you’re reading this article, you’re most likely particularly interested in Online Forex Trading, or are simply like many looking for an alternative investment. As the world teeters on the brink of economic catastrophe, with economists anticipating another global economic recession a little over 10 years after we came out of one, institutional investors, businesses, households and everyday people are frantically searching for alternative investments.
Forex investment has a lot to offer all kinds of traders, from beginners to professional traders; and in this article Geldex explores the five most compelling reasons why you must consider Online Forex Trading as your next investment move.
Global Economic Hedge
With Global economic activity experiencing a broad-based and sharper-than-expected slowdown, inflation has been higher than expected in the aftermath of lingering effects from the COVID-19 pandemic, Russia’s invasion of Ukraine, the rising cost of living, and tightening financial situations. These are all weighing heavily, especially in the face of global growth being projected to slow from 6.0% in 2021 to 2.7% in 2023 – a record low since 2001. This comes with attendant inflation – forecast to rise from 4.7% in 2021 to 8.8% by the end of 2022.
The IMF has warned: “The worst is yet to come, and for many people 2023 will feel like a recession”. As Ghana engages in Debt Restructuring with the International Monetary Fund, government securities, including Treasury bills and bonds – previously regarded as an all-safe, risk-free investments – are most likely to lose a large aspect of that safety and protection from risk.
Now more than ever, in the present economic situation Forex Investment has become an absolute necessity to guard against financial shocks, missing out on high-potential opportunities, and to hedge against inflation.
The currency market allows you to invest in Forex by trading currencies based on how you perceive their relative values will change over a period of time. Depending on which direction you believe a particular currency is headed, you can speculate or project both ways; either long or short. After having gained enough experience, you can allocate your risk across the currencies of several countries; allowing you to profit from changing global macroeconomic conditions.
A level playing field
Online Forex Trading was previously reserved for multi-national corporations, banks, financial institutions, and very wealthy investors. With prevalence of the Internet and technological advancements, Forex trading companies and proprietary currency trading platforms, this investment opportunity is now open to everyone willing to invest. The same technologies that have made online forex trading possible are the same ones that have made information freely available.
In addition, unlike other capital markets, the news that drives currency prices is available to everyone on a real-time basis. Unlike stocks, bonds and even commodities which can many times be influenced by proprietary information held by insiders and key stakeholders of those assets, control of the currency market is much less centralized – and thus far less influenced by insider information, if ever. This aspect of online forex trading makes it one of the most transparent markets for trading.
Knowledge is indeed power, and today’s information technology provides it in abundance. The speed at which technological advancements have ensured news travels across the globe means that someone investing in Forex can monitor their open positions from anywhere on the globe, and can react just as swiftly as a professional trading from the very centre of it in New York, London or Tokyo. Resources previously available only to large financial institutions are now open to all who may be interested in Forex investment.
This means you can do your own analysis of events that influence a country’s economic health and actual monetary flow, which are the elements driving and impacting currency valuations. Thus, the online forex trading market cannot be controlled by one person or a few individuals and institutions. Considering how incredibly complex the online forex market can be, coupled with the myriad of influences (both macro and micro) they are subject to, everyday people investing in Forex are now better-positioned than they have ever been to take advantage of information and use it to manage their capital profitably.
In simple terms, volatility refers to the price fluctuations of assets. It measures the difference between the opening and closing prices over a period of time. When looking to invest, many people tend to gravitate toward more stable options – such as the Real estate market, which is largely viewed as a solid investment market. But who says volatility has to be a bad thing? In actual fact, when a market moves frequently it creates an avenue for many opportunities to make strong gains within a relatively short period of time. Warren Buffet was once quoted as saying: “Look at market fluctuations (volatility) as a friend, rather than an enemy”. The volatility of currencies is influenced by a number of factors, including but not limited to:
- The economic stability of a particular country
- Global economic happenings as a whole
- Political news, events and policies (e.g., interest rate fluctuations, currency revaluations, political upheavals, trading sanctions, monetary policy changes, trade deficits, tax changes, import restrictions, etc.)
- Trade deals, etc.
On any given day, Forex markets can move between 50-100 pips on a major currency pairing, allowing investors to cash-in on poor-performing assets or seize upon potential opportunities that present themselves.
Forex Market regulations refer to the rules, laws and guidelines that Forex Trading Companies or brokers operating within the Online FX Trading space must abide by. They extend to the continuous oversight and enforcement of these rules. Forex Investment is well regulated by several bodies across the globe – including CYSEC (Cyprus Securities and Exchange Commission), the FCA (Financial Conduct Authority), ASIC (Australian Securities and Investment Commission) and FSA (Financial Services Authority) to mention a few.
The best Forex Trading Companies in Africa are regulated either by any of these or in multiple jurisdictions. Forex Trading Companies which are licenced and regulated Forex brokers are subject to recurrent audits, reviews and evaluations to ensure they meet industry standards. They are expected to follow rigorous operating guidelines, are required to observe principles of best practice, and are constantly monitored to ensure same. The objective of these regulations is to ensure ethical and fair business behaviour.
A licenced and regulated broker assures you your investments are safeguarded by offering secured currency trading platforms; this way, you know that if you set realistic goals and put in the work, you can trade profitably without having to worry about getting scammed. We recommend that you read our article on Choosing the Best Forex Broker to Trade With for more insight into this point.
Geldex is licenced and regulated in several jurisdictions across the globe and we’re always working on meeting the best industry practice and regulations for the safety and security of our investors in Ghana as well.
Trade 24-hours a day; highs or lows
There are trading opportunities in any market condition. In our previous article, The Benefits of Online Forex Trading, we expounded at length the advantages to be gained from the market 24 hours a day. Unlike some other capital markets, the forex market does not sleep or wait for an opening bell, nor is there any need of scrambling to get your order executed before a daily close. Trading begins with opening of the Sydney session and closes with the New York session, by which time it starts all over again. This means you can trade on your schedule; you can enter and exit a trade whenever you want; on your commute to or from work; during your lunch hour; while you wait in a lounge or lobby to see someone; or while you wait to catch a flight.
Also, you can trade both bullish trends and bearish trends, i.e., both rising and falling markets. This is referred to as Directional Trading; In effect, if you believe a currency pair is going to increase in value, you can buy it – referred to as “Going Long”; On the other hand, if you believe the pair is going to decrease in value, you could sell it or “Go Short”. This means you can trade whether the market is rising or falling. How convenient is that? It only depends on you to accurately project which direction it will go. In effect, you can trade when you believe the value or price of a currency pair is going up, or when you anticipate it to be going down.
Online forex trading can be beneficial in many ways, and as with any venture there are likewise associated risks that should not be taken lightly. Forex trading isn’t a pyramid or get-rich-quick scheme, but rather a long-term investment strategy that requires knowledge acquisition and a tactful comprehension of how worldwide happenings can influence the market. Sign on to a Forex Trading Course to help you do this, and refer to our article – Why Education and Training is a must Before Trading Forex.
To start Forex Trading, you do not need a huge capital. Compared to other markets, the forex market is very accessible and beginner-friendly. From as low as US$10, Geldex allows you to begin trading forex online. You can start with a small amount, putting to the test what you learn along the way from a good Forex Trading Course, and grow your account with consistency, discipline, and patience. Most individuals you see trading 6 or 7 figures started in the same way.
- Find a Reliable Broker
- Get a Good Forex Education
- Develop a Trading Plan
- Manage your Risk
- Be Patient and Realistic
Take This Step for The Financial Stability and Freedom You Desire.
Brought to you by Geldex Invest on Behalf of Growell Capital.