Foreign Currency Exchange Trading and Compound Interest

Foreign currency exchange trading is extremely lucrative and an important strategy employed by the wealthy to become rich and increase their wealth using compound interest. Interest is applied daily therefore capital sums increase on a daily basis so that interest is applied to an ever increasing principal.

However there is a conspiracy going on and has been for years and that is to condition the average man in the street into believing that foreign currency exchange trading is only to be considered by the wealthy and/or is high risk. Nothing could be further from the truth. Just like many other investments foreign currency exchange trading can be high, medium or low risk depending on the strategy employed.

How many times has your financial advisor alerted you to the benefits of forex?

The chances are he doesn't know the first thing about this market. After all do you think your government wants you to be wealthy and independent? This might account for the complete lack of education and promotion of forex, as it is commonly called, at home. If banks routinely enter into this type of lucrative investment then why shouldn't you?

"The aim of public education is not to spread enlightenment at all; it is simply to reduce as many individuals as possible to the same safe level, to breed a standard citizenry, to put down dissent and originality" Henry Mencken

One of the problems that faces investors is that when traditional investments like property and the stock market reach an all time high the only way to go is down. Also it does seem to be the small investor who buys at the top of the market and then swears he will never invest again because of the 'loss' he has made. Of course these mistakes should be positively invited so that he or she will learn an important lesson. Unfortunately this doesn't tend to happen and he or she will inevitably hand over the reins of his/her portfolio to some faceless person who doesn't care about the particular investment just the commission earned.

Another problem that is facing many.

Pensions are doomed!

They will not recover!

There are four main reasons why not:

1. Most pension schemes are set up by large corporations with the corresponding costs that all large businesses have, eg. admin, salesmen, actuaries and so on. It's no coincidence that corporations are getting much larger with even bigger profits but ask yourself this - do you see any of it? (see 4 below);

2. We are all living much longer;

3. Investing in stocks and shares is now much riskier (markets are being routinely manipulated by corporations, traders and government);

4. With reference to 1 above your pension provider will keep it's shareholders funded first and it's pension scheme funded second.

There is a clear way out of this mess. It is to take responsibility for yourself and your investments. For far too long people have not taken responsibility for themselves but instead used other entities such as government to do this important task. People, quite naturaly want to feel safe and their investments too but to allow other people or organisations to have complete responsibility is dangerous. The only one that can ensure your survival in these turbulent times is YOU!

Furthermore life is not supposed to be 100% safe. This is an unrealistic utopia. If it were possible people would only do things to make it unsafe again eg. gamble.

There are distinct advantages to foreign currency exchange trading:

1. You don't have to pay other people to do the work. There are of course different levels of participation. You can trade directly or use traders if you don't know what you are doing. Even so you will not have all the overheads a pension company would have;

2. You don't have to be regulated if you make your own decisions, as a pension company would, therefore it is much cheaper;

3. At last you can break free from the conditioning of your upbringing and home country and feel more in control of your own destiny;

4. No-one cares about your outcome more than you do;

5. Investments are more likely to be profitable if costs are lower and I can assure you they are.

You can invest directly in the foreign exchange currency market. This market is a truthful market(very difficult to manipulate) worth 4 trillion US dollars. Trading is 24 hrs a day 5 days per week. Foreign currency exchange trading allows a country's currency to be exchanged for another. Because of fluctuations in the exchange rates you can make a profit or a loss.

Forex is used by corporations, large central banks governments and by individuals. Traditionally you needed a large some of money to be able to trade - hence the requirement to be wealthy - however the average man in the street can now participate due to managed funds ie money is pooled from a large number of investors (just like traditional managed funds with a stock market investment). Please note that just like managed funds in the stock market your account and therefore your funds are completely separate from other investors. I highly recommend this forex investment which uses managed funds and has made large returns since inception.

I think foreign exchange trading is going to be the preferred asset class in the years to come. It is highly liquid and you can quickly exchange one currency for another if required. At the time of writing this (2010) people are quite rightly trying to preserve capital by buying commodities such as gold and hanging on to other illiquid asset classes such as property. This can be a problem in itself because it is easy to end up in a scenario where you have no liquidity at all. Foreign currency exchange trading is a good solution and represents another asset class which can be sold very quickly provided the more popular currency pairs are used (as in the investment above) and easily turned into cash. Furthermore your cash can be held in multi currency accounts to hedge against devaluation.