Investment Types
There are a lot of legal ways to make money on Forex. Each method has the following characteristics:
- Profitability
- Risk level
- Minimum deposit
- Requirements for skills and abilities in trading
- Involvement in the trading process
By the level of involvement and the ability to influence the trading process, there are five main types of investment:
- Self-trading
- Trading with Expert Advisors
- Copy trading
- Trust management
- PAMM and MAM accounts
Self-Trading
This method will require maximum involvement. It is worth choosing if you have enough time and energy. If you are not prepared to take the training and trading process seriously, then you risk losing your investment. In this case, methods with less involvement are more suitable for you.
Advantages
- You take 100% of the profits.
- You can start trading on your own with minimal capital. When trading on a cent account, you can open trades with as little as $10 in your account.
- You will have complete freedom of action. Only you decide which strategy to use, when to deposit and withdraw money, and only you set the risk level.
Disadvantages
- It will take a lot of time and effort to learn how to trade. It won't be enough to read a couple of articles. You should read several books about trading, study a few strategies, and only then proceed to practice. It can take a couple of years from the moment you start trading until you get a stable profit.
- You will inevitably lose money. This is a part of the process. If you are not ready to lose money, it is better to entrust it to professionals right away.
- Self-trading is stressful. All responsibility for mistakes and losses lies solely with you.
- Forex requires discipline. If you are not ready to follow your plan, you will be losing money. Self-trading requires work on yourself.
It is worth remembering that 90% of novice investors fail to succeed in the foreign exchange market. This happens for a number of reasons:
- Lack of discipline
- Emotion trading
- Skipping an important stage of theoretical training
- Ignoring practice on a demo account
- Refusal to trade after a couple of failures
Nevertheless, it is self-trading that can bring you the maximum level of profit 100% of which you take for yourself. For more experienced traders, Forex becomes the main source of income and gives them financial independence.
But remember that trading on your own is a tricky process. If you are not ready to take it seriously, then you should give preference to other investment methods which I will tell about in the following articles.