Nowadays private investment, having a widespread effect, tends to become more large-scale than ever. Driving this trend is that investing in some kind of business is the sole way of funds keeping and augmentation.
One instrument may not be equivalent to another, as each of them has its own risk level and expected gains volume. The collapse of the US mortgage system, giving rise to the international financial crisis and generating a credibility gap against many investment mechanisms, compels private investors to transform “Where to invest?” into more relevant and sharp question: “What is the most lucrative investment?”
Then, small wonder, when the question of any specific investment decision is raised, an investor gives preference to those tools, capable of ensuring high liquidity and more reliability. These criteria cause a significant shift in favour of the foreign exchange market (forex) while choosing an alternative private investment way.
The fact forex has a number of advantages over other markets, causing its investment attractiveness both for businesses and individuals, is beyond all doubt. First, market accessibility is worth mentioning. A start-up in forex just requires to open a trading account in any bank or brokerage firm providing services in the financial sector and to place the money in an account – a security deposit required to qualify for the transactions. A very low financial barrier manifests market accessibility as well. This implies having a minimum deposit amount at newbie’s disposal is enough to access the forex market.
Secondly, currency purchase and sale in the absence of the full contract amount is feasible within Forex. For transactions only an initial margin is needed, then it may be supplemented with a leverage. Thus, a contract volume may be 20-100 times greater than the amount of originally invested funds.
The third advantage consists in dramatically high potential yield. Exchange rates’ volatility is that within one trading day it can reach a few percent, enabling the trader to earn funds in view of leverage sometimes up to several tens of percent or even more of the maintenance margin amount.
Fourthly, Forex is the only market operating round-the-clock. Ability to work in the financial markets in Asia, America and Europe has emerged due to their integration into united global communication network. Noctidial access to foreign exchange market makes it possible to open and close orders in the most auspicious time and at the best price.
The other market peculiarity is its high liquidity. Due to the enormous volume of transactions committed on a daily basis, forex is the most liquid market in the world. At any time you can open and close positions at the prices prevailing at the moment on the world market. Tremendous forex trade turnover makes you possible to find someone willing to buy smth you’re selling (or vice versa) at any moment at market price.
It’s no exaggeration that high efficiency and immediacy of trading endows forex market with clear superiority. Owing to trading platforms, graphical interfaces provided by a brokerage firm and used to trade currencies via Internet, which are easy of access for investors engaged in trading on forex, a great opportunity to do what was previously inconceivable – to trade currencies from anywhere and at any time – has recently occurred.
However, is should be mentioned about main forex pitfall, arising when it comes to choosing a broker. The crux of the matter is that the most reliable are those brokers whose sustainability is confirmed by several factors. By way of example, MasterForex, one of the leading companies dealing in Russia and South-East Asia, some broker’s characteristics, the lack of which casts doubt both on company reliability and the investor’s prosperity, can be identified.
1 Steadfast broker’s market position is confirmed in the first place by successful operation of the company for several years. “Perpetual progressive development is not just a declaration of intent for MasterForex, but an indispensable element of success. Having stormed by leaps and bounds into the market in 2006, the company achieved the status of top-ranked broker with a reliable reputation”, MasterForex President Igor Volkov says.
2 International nature of activity. Trustworthy company’s activity in this business sector should not be limited by local constraints. High degree of technical equipment and diversified expertise of company personnel makes possible to move the company to the international level, as it happened with MasterForex. Today the company has representative offices in almost all over the world, the head-quarter personnel interact with clients in six languages (English, Russian, Chinese, Indonesian, Arabic and Korean) and doesn’t intend to stop at what has been accomplished.
3 Integration into the trade community. A solid Forex broker needs constantly to raise the level of awareness and professionalism of their own business environment. Therefore, MasterForex experts are regularly involved in Forex events of every sort and kind. Large-scale b2b-forums, exhibitions and conferences are the platforms where company specialists share their experiences with business peers, develop professional maxims and conduct rules in the forex market and inform the interested audiences about the investment possibilities of this financial tool. For instance, MasterForex attended the third all-Russian Financial Institutions and Brokers congress in Moscow. And in Kiev MasterForex became the main sponsor of the 1st in the CIS barcamp ForexCamp, dealing with most urgent and complex Forex issues and features of trading in Russia and Ukraine. Forex-events are not only the opportunity to gain new knowledge, but they are a ritual that allows each trader to be part of an elite society.
4 Client-centred orientation and innovation. Satisfying any of the client’s needs and wishes, MasterForex innovates incessantly in order to improve both client support and trading conditions. The latest company’s breakthrough is giving traders access to the interbank foreign exchange market by transactions withdrawal directly into the electronic communication network (ECN). ECN is an innovative technology that allows traders to trade in terms of an extremely high liquidity, unsurpassed speed of orders execution and other favorable trading conditions. This retail solution, destined for trading in the OTC environment, brings Forex-trading to the stock market trade. ECN-system offers a number of new advantages for private investors, on the one hand increasing the number of bidders by means of large financial corporations, offering their quotations, on the other hand reducing the time required to bargain through the use of up-to-date communication and electronic data processing. Injecting innovations helps best meet customer needs, developing the company simultaneously.