How does Forex Market differ from all other types of markets?
For one, forex markets are not controlled by a central governing body. Unlike stocks or options, currency trading or forex trading has no regulated exchange and has no clearing office that will guarantee each trade that happens. All members trade or deal with each other based on credit agreements. So in a nutshell, forex marketing has no legal agreements and deals are always done with a handshake and is equally dependent on the marketer’s sense of business ethics.
Basically, the forex market is considered as the “Wild West” of finance. It’s basically where everything happens and it’s a lawless place where everyone can gain a profit by using dubious or legal means. Of course, the dubious ones get thrown into jail. Literally.
So wait, are you saying that forex trading or marketing is basically a gamble. More or less, yes. Why did you think only a few forex traders ever survive after years and years of experimenting and gauging the forex market?
What is a PIP?
PIP stands for “percentage in point”. It’s one of the most important things to remember when dealing with forex trading. In the forex market, prices are always quoted by the fourth decimal point. So for example, a perfume or beauty soap has a quote of 1.2000. Any change that happens in the fourth decimal is called 1 pip and it is typically equivalent to 1/100th of 1%. Sounds complicated, right? Don’t worry, you’ll get the hang of it.
Also, it is important to note that as far as world currencies are concerned, only the Japanese Yen is an exception to the PIP rule. 1 Japanese yen is now equivalent to US$ 0.01. Therefore, if you look at the USD/JY pair, the quotation only has two decimal points taken away. For example, 1/100th of yen is used, instead of 1/1000th with other major currencies in the world.
This is basic forex marketing knowledge, so better take note of this kiddos.
What exactly are you selling/buying in the forex market?
One newbie marketer asked me this question. And boy was he surprised when I gave him an honest answer.
For those who’ve been in the forex trading game for years, the forex market is purely a speculative market. Therefore, we’re not selling or buying anything. There is no actual exchange of currencies in the forex market nor do we exchange any product or service. All trades only exist as computer data and nothing more.
So if we’re not trading anything, why call it forex trading? The primary reason why the forex market exists is to help process the exchange of one currency to another in order for multinational companies to trade currencies on a continuous basis. However, this actual trade is only 20% of the market share. The actual 80% in the trade system is still purely speculative and is placed there by multi-billion dollar hedge funds.
Everybody knows that the price of the rent for a house is influenced by so many things, starting with the location of the house or apartment and ending with the contents of the said house. Some people earn a lot of money by simply renting out apartments in a complex, or houses to different tenants.
However, even if this can be a successful business, is not something easy. Real estate investment requires a lot of knowledge in this area, and always a thorough analysis of the market.
Here are a few tips about how to do great real estate investments, even if you are a beginner in this area.
First of all, you need to know how much money you have available for buying a property that will bring you profit. You will need to have a considerable amount for this, as it’s better to buy a small apartment complex, than a single house. Identify the possibilities for using your own finances, finding a financial institution that offers you a loan or finding investors. Each of these options is viable, so start looking.
Once you have determined the amount of money that you can use, start looking for a property. There are many available properties in your area, so all you have to do is find the right one. Consider the location of the building and also what advantages are there for using it – the access roads, the magazines that are around, if there is any park. All these count, because with many advantages it would be easier to find tenants.
The House Inspection
This is something you will have to request, because it is the only way to know the condition of the property. The house inspector will tell you all about it, as he/she is highly trained in finding exactly if there is something wrong with the building. You will know about the structure of the building, the walls, the roof, the plumbing, and the materials that were used and if there are any faults with the building. The house inspection will also tell you if you need further investment in repairing different problems.
The House Valuation
This procedure will give you the market value and the investment value, if you ask for both of them. Usually, the second one is certainly needed, especially because you are looking to make an investment and not just buy the property for yourself. The valuer will give you a better evaluation if you have available the report from the house inspector. This way, you will know exactly what your building’s worth is if you plan to invest in it.
Once you have bought the building, determine who you will be working with. You certainly need a plan for making it work, and it is better that you are surrounded by people you trust. Managing a complex of apartments can be hard enough, so you will probably need a manager, if you can’t do it yourself. Keep in mind though that a manager will ask you the regular price for maintaining, no matter if you have tenants or not.
No matter what you’ve heard about real estate investments, make sure you remain realistic in your expectations. If you don’t find tenants, you will have to sustain your business for some time. A constant cash flow can be considered after all the apartments have been rented, and you remain with some profit after you pay the mortgage (if you have any), the bills and the utilities and so on.