We are now leaving during the times of major changes. A couple of decades ago, those guys who traded currencies in the USSR were sent to prison while today there is no USSR and hardly anyone who hasn’t heard about Forex, the world’s biggest financial market where individuals and institutions exchange foreign currencies, mostly for speculative reasons.
Unfortunately, most people around the globe lack decent financial literacy. Most beginners come to financial markets (including Forex) to get rich fast. However, they fall prey to greed or fears and eventually lose, thereby creating various delusions and myths about Forex.
At the same time mass media also like speculating on the Forex industry, publishing various delusive articles on the topic, which do not allow beginning traders to understand the essence of the market.
Traders and Investors – Different or Alike?
Who can consider currency exchange operation more objectively? Who has experience and skills to tell us about the fine points of winning trading? These are traders and investors! Those who trade Forex just have to be experts in what they do since they trade Forex for a living.
There are many trading experts among the members of Masterforex-V Academy. They say that only traders can be more or less objective when talking about Forex or any other financial market. When such experts are united into a certain club (like Masterforex-V Academy) they have and share powerful tips and techniques, discuss future market behaviours and possible scenarios, which gives them a competitive edge over others in terms of foreseeing currency exchange rates and benefiting from it.
When it comes to understanding the difference between a (professional) trader and a (professional) investor, a trader is a person who has enough skills and experience to open and close trades and benefit from price fluctuations (currency rate fluctuation, if this is Forex). A Forex trader doesn’t care whether, say, EURUSD is going up or down since he can trad in any direction. All they need is to follow the tendency and the smart money. Traders usually scalp or trade intraday. However, there are mid-term and long-term traders.
Long-term traders can be consider investors since their tactics and strategies are slightly different. They are more focused on money management and stability. They open and close their traders very rarely.
For example, the chart above indicates a 6-month-long trade in the market of EURUSD.
Theoretically, a long-term trader (or an investor) who invested in the foreseen growth of EURUSD could earn $13 000 per standard lot during 15 months (the rally from 1.2185 to 1.3485).
On top of that, professional investors do not use leverage higher than 1:5 and reduce exposure, therefore their profits are lower than those earned by short-term or mid-term traders.
If to take the mentioned period in to account, a mid-term investor could open 5 trades to earn 2500 points while intraday trader could open thousands of trades to earn 10 000 points of profit or even more.
Well, when Forex commercials say you can increase your capital by 100 times within 12 months, it is theoretically possible. Still, when your leverage is high and you risk a decent share of your capital, you may eventually lose everything before you can boost you capital. Risk management is a key factor in successful trading. That is why most beginners lose! They do not take this major factor into account while they should.
When it comes to Forex, investors who use PAMM services. They invest they trust their money with professional managing traders and gain passive incomes.
Well, as you can see the differences between traders and investors go down to activity/frequency and goals. Still, there are some things that unite them. Both professional traders and investors always look fr optimal risk-reward ratios to put the odds in their favor, and you should too if you want to join them to show consistent results.
By the way, if you are new to Forex and trading in general, you are strongly recommended to visit the FREE school for traders and investors under Masterforex-v Academy! Good luck!
