Forex trading became accessible with the advent of online brokers a decade ago. Some people enter trading to make a quick buck, while others enter it more conservatively with more reasonable, long-term profit expectations. So is it speculation in forex trading or a real investment over time?
Estimate in the short term
It is very common to practice short-term trading with positions lasting a few minutes to a few hours in the market. This is called scalping or practicing day trading. This type of trading is considered more speculative and allows you to take advantage of small changes on the court. Traders who treat the market in this way use techniques such as range trading for example or trading key psychological price levels (pivot points, support and resistance) just as can be done on long-term charts. But here the volatility of results can be more pronounced and the emotions associated with trading such as stress can be more present. Short-term speculation is common among individuals, but it also requires a certain availability and is therefore not suitable for everyone.
Here is an example of a short-term trading session in video format, where our trader Fab made $79 in less than an hour of trading. This will give you a good overview of how to trade short term and how to make quick profits.
Long term investment
If the optics are the return on a long-term investment when one starts trading, then swing trading or position trading seems to be the most suitable. The goal here is to take advantage of major underlying trends in the financial markets over several weeks or even months.
Another possibility that is more akin to long-term passive investing is to go social trading. One can allocate 10 minutes per week to social trading for follow-up and selection of traders or portfolio diversification, allowing minimal time spent on potentially high returns on investment. Copyfunds, which look like investments within mutual funds, can also be considered long-term and rather conservative investments.
Forex trading with broker Etoro
After reading this article, you should agree that forex trading is speculation but also investment. It really all depends on what you want to do with the activity. Regardless of one’s perspective on trading, it is essential to visit an authorized forex broker to use a reliable trading platform. Etoro is an example of an authorized and recommended broker and it is possible to open an Etoro account from only a €200 deposit, which also entitles the Forexagon guarantee.
eToro is a multi-asset platform that offers both investing in stocks and crypto-assets as well as CFD trading.
Please note that CFDs carry a high risk of losing money quickly due to complex instruments and leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You need to ask yourself if you understand how CFDs work and if you can take the high risk of losing your money.
Past performance is not indicative of future results. The trading history presented is less than 5 full years and may not be sufficient as a basis for an investment decision.
Copy Trading is a portfolio management service, provided by Etoro (Europe) Limited, which is authorized and regulated by the Cyprus Securities and Exchange Commission.
Crypto-assets are volatile instruments that can fluctuate significantly over a short period of time and are therefore not suitable for all investors. Apart from CFDs, trading of crypto assets is unregulated and therefore not supervised by any EU regulatory framework.