In the era of the 70s to the late 90’s, the laymen were more accustomed to investing in the real sector such as property and plantation sectors. But after a period of monetary crisis hit our country, investors began to look for the type of investment with a large return in a short time and this is where the investment trend of the financial sector began to boom.
Real sector investment (eg property) generally requires a large capital and takes a relatively long time to develop because of the amount of capital liquidity is not as fast as the financial sector.
Take for example when we buy a house for investment. The surplus value is usually never decreased and always increases. But on the other hand, after a few years, you are about to dilute your investment, then you should find someone who has enough funds to buy your home whose value may have gone up tens to hundreds of percent. Finding a buyer like this is not easy, this is where the liquidity problem occurs.
Another case with the financial sector. Investment in this sector has a tendency to be more liquid and return relatively larger, in proportion to the risk. Another plus is the number of investment products offered in this sector.
Then where is Forex Trading position? He is in the Futures & Commodity Futures Market. Forex trading is an investment in the financial sector is classified as the most high-risk-high return investment. That is, the opportunity to earn huge profits can even reach hundreds of percent per month but offset by the possibility of large losses if not managed properly.
You need to understand the concept of high risk-high return here. Basically, all types of investments have the possibility of losing money. The amount of potential loss will be proportional to the amount of potential benefits that we can get here. The greater the potential benefits that can be obtained here, the greater the potential losses that can arise and vice versa.
If you are a safe investor who does not like the risks or ‘shocks’ in your investment portfolio, then it seems that forex trading is not the kind of investment that suits you. This is because forex trading is an investment that has a very fast movement in liquidity and in price movements. Logically, forex trading can bring you a profit of tens to hundreds of percent in one day but can also bring you the same amount of loss.
If you are a risk taker, then forex trading is the type of investment that suits you, in the sense to gain big profits, then he is ready to bear the potential for losses as great.
Then is there any way to minimize potential losses? Of course there is! Risk management and your analytical skills are the key here. The better you run the risk management and analyze the market price movements, the smaller the potential loss that can occur. Everything is directly proportional.