In order for us to proceed it is imperative we first talk about, Investing and Trading so as to prepare your mindset when you start looking at Forex and Cryptocurrency.
INVESTING
Investing in this journey requires us to be able to get PART of our hard-earned money and put it in business hoping to get some more money (profits). Notice the word part is used as we do not invest all our money. The Goal is to invest an amount that you are comfortable with losing/risking in the case that the investment does not go accordingly.
TRADING
Trading requires us to also use PART of our hard-earned money and put it in a business or to buy assets that we think will gain value so that we can sell later on upon reaching the desired value and get the profit. Trading unlike investing has a slightly short time period as compared to investing.
An example of investing would be putting part of your funds in a fixed account with an institution that promises you 5% interest after one year on whatever amount you invest. (e.g 20000 invested at 5% which is expressed as 0.05 will mean an interest of 1000 at the end of the year.) It will take you one year to make an extra 1000 on your 20000 investment after a year.
In May 2012 BTC price was at $5 per coin if you had risked $100 of your money invested in getting you 20 coins and waiting for one year until May 2013 when the price rose to $110 per BTC. Your 20 coins would be worth $2200 (220% return on your initial $100 investment).
NOTE: Whatever amount you have. Spend 75%, invest 15% and save 10%.
A simple example of trading would be investing 250 to buy 5 trays of eggs (50 per tray). You boil a tray and sell each egg at 2.5 per egg(2.5×30 = 75). If you sell all 5 trays then you get a (75x5 = 375). Making you an extra 125 on your initial investment of 250 which is a 50% interest. The risk is you have to sell your boiled eggs fast and finish all your trays before the eggs spoil.
Trading requires us to buy assets and as soon as they gain value will sell them off to take the profit. in the example of eggs if you manage to sell all 5 trays within a month all shorter and continue to do it for the next 12 months. You can have a 600% (50% x 12 months) interest on your 250. But then again this all depends on how quickly you sell your boiled eggs. If the eggs spoil you will make a loss.
Cryptocurrency
The journey will require you to research and find an interesting project on the blockchain, where you will find many projects. When you find something interesting and would like to support this project you can show support by buying/investing part of your hard-earned money in their native coin/token (e.g. Bitcoin, Ethereum, BNB, Shiba Inu, etc.) with faith that the project succeeds and in doing so earning you value on your invested money.
It has become increasingly popular over the past several years – as of 2018, there were more than 1,600 cryptocurrencies, and the number is constantly growing. Increase in demand for developers of new ideas and projects on the blockchain means we can put our money to work in these great projects.
Forex
The Forex market is where banks, businesses, governments, investors and traders come to exchange and speculate on currencies. Forex Trading is the speculation on price of one currency against another. For example if you think the euro is going to rise against the U.S dollar, we can buy the EURUSD pair while its low and then sell it at a higher price and make a profit. However if U.S dollar strengthens you will be losing on your position. So its important to be aware of the risk involved in trading Forex.
You will be required to do your own analysis which includes Technical (drawing lines and patterns on charts) and Fundamental (keeping up with news event related to your currency pair) so as to create an edge in the forex market.
With the above information it is imperative we are aware of the risk involved in crypto and forex, and not only just the rewards. This is not financial advise nor a financial service provider. This is purely educational for those that desire to gain some knowledge in this space.
