Investors and traders in the FOREX market

Investors and traders in the currency market FOREX.

If you have free money and you want to get their income above that banks can offer

or government bonds, then it makes sense to consider the option of investing in the foreign exchange market Forex. Here you have two options: to become an investor or trader. The choice will depend on whether you have time and desire to explore their own trading, or you want to trust the professionals to increase your capital. Consider the investment, both in terms of investor and trader.

Investor

Investing like those who have free funds, but no time or desire to learn professional exchange, stock and other financial markets, which would itself trading. In this case, you can take advantage of such services as asset management. Currently, there are a myriad of companies, brokerage firms and individuals who offer this service to investors. In what is primarily to draw the attention of the investor in selecting a management company? Given that the first and basic rule of finance - it is the preservation of initial capital, first of all need to ask what guarantees the preservation of investors' funds are provided in the management company.

Types of risk an investor may be as follows:

1. Management Company insures deposits of investors in the insurance company, in this case a third party (insurance company) guarantees the complete or partial refund in the event of financial losses.

2. Another form of insurance may be a reserve fund, designed specifically for the case when investors need to pay damages. For example the total fund = 100 $ 000, the contribution of the investor = $ 5 000, Reserve Account = $ 40 000.

Getting that input from the investor at $ 5 000 / 100 000 $ * 100% = 5% of the total fund. Hence the investor is entitled to receive 5% * 40 $ 000 = $ 2 000 from the contingency fund. If at the time of the withdrawal of investors' funds have a balance on your account equal to

4 000 $ (that is, Drawdown on account of 1 000 $), then the investor is paid from the reserve account, the outstanding amount of 1 000 $, but if at the time of the withdrawal means an investor has a balance equal to $ 2 500 from a reserve account to pay all $ 2 000 that the investor is entitled to receive. The creation of a reserve account does not mean that investors are guaranteed 100% or even 100% safety deposit. This is only an insurance reserve fund to guarantee partial or full repayment of the account Drawdown investor.

3. Another version of the insurance financial risk investor. As part of the financial risk borne by the trader directly, which will make transactions on the account investor. For example a trader who would manage the funds the investor is making a contribution from its own resources, which determines the amount of trusted that the trader capital. If the trader commits an unprofitable deal, he loses it is his contribution, as the investor does not bear financial losses.

For example, the base yield trader at more than 100% per annum, the average level of 150-200%. Trading strategies trader at the historic period, showed the greatest Drawdown of 10%. Trader made a deposit of $ 10 000, and receives in the management of up to 100 000 $, that is exactly so that the trader's own funds sufficient to ensure the maximum statistically probable Drawdown. Assume Drawdown was 8%, ie, the trader had lost $ 8000 of their own money.

The investor in this case did not lose a single cent. With further trade trader played losses and a profit. That is back to $ 8000, plus earned a certain amount above the authorized management in investor capital. Thus the investor funds are insured, and of course in this case, the maximum Drawdown of the account investor is limited to 10%.

4. The form of insurance can also serve as a so-called "limit losses." If the trader does not have its own funds,

either they are not sufficient to ensure the loss of a major capital investor, but the trader is popular among

investors (eg, due to the high-income), it introduces the concept - a limit losses. That is because the trader

own resources is not, but quite promising, the investor accepts the risk, which is set by the investor or trader, based on the trader's trading strategy. Warranty Management Company in this case are as follows - trading account will be blocked on reaching limit losses. More than just an investor considered acceptable, he will not lose.

In addition to the insurance of financial risks, it is desirable that a management company has provided investors a report indicating previous successes, this report may constitute steytment, certified by independent brokeromili auditorami.Tak same, well, if there is an opportunity to familiarize themselves with steytmentami, traders who are to be to manage investor funds.

It would be superfluous, to ask where the management company is registered as a legal entity that would know of

legislation which the country is governed by it, but how would an investor do not have to go to the Cayman Islands or Gibraltar - claims management company.

Defined with the above points, and deciding that the office has found credible, the investor should pay attention to the following issues: minimum deposit - there is quite a wide range of firms that are in management, both from $ 100, and 100 000 $. Obviously, the choice here depends on the thickness of a purse investor. You should also find out the distribution of profits between the management company and the investor. The ratios are also different, as of 50/50, and 15/85 from. Investors should pay attention to the fact there is a certain fixed monthly fee