HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
NordFX information and reviews
NordFX
86%

The global financial trend of the hour: Forex investments


Quite the confusion is afoot in the financial markets. Tighter regulation, rising inflation, energy sector disruptions, social unrest and wars have taken a toll on the world's economies. How come Forex, as a means of investment, has come up on top as a global trend in 2022? Against the backdrop of current events, the international broker’s expert team at OctaFX has gathered some answers.

The financial world is enduring some important shifts and shocks right now. This has been going on for at least two and a half years - since the start of the global coronavirus pandemic. Now - because of the monetary policies implemented by most national economies - inflation is spreading and raging on every continent like a virus. It leaves no country untouched. Ordinary people lose their savings, funds, and the purchasing power of their national currencies. Governments regulate as much as they can. But current circumstances, many of which are quite unprecedented in recent memory, led to policies restricting some financial markets. Among them—the Forex market. But the thing is that it is Forex investments that have gained traction recently, having become an international trend by now.

Now that we know where we are at, we can take a look back into the history of financial investments—specifically, how it pertains to the Foreign Exchange market.

The plain history of making investments

Making investments goes way back. Thousands of years ago, people of different tribes, villages, and regions found routes and means to exchange goods of all kinds: farm animals, precious metals and rocks, or domesticated wheat, to just name a few. Each of these ancient transactions and trades were investments—as capital, as trust in future trade relations, or often as a means of survival.

The Foreign Exchange market as a hub of making investments is almost as old—since at least the invention of the coin as an exchange currency, so at least around 600 B.C. It can be considered as a dynamic basket of foreign currencies and a network of exchanges. To put it even more bluntly, Forex represents the process of changing one currency into another. The Foreign Exchange market is decentralised by nature. Today, it exists completely online and utilises a vast variety of different countries, currencies, and commodities.

Making a huge leap into the present day, Forex experiences a significant global revival as a way of making investments. The age of quarantine, home office and lockdowns, mass lay-offs, and blunt economic uncertainty fueled by inflation forced many people into researching alternative approaches to generating additional or passive income online. Forex came out on top.

The global financial trend of the hour: Forex investments

Why did this trend emerge now?

Many factors contributed to a heightened interest in Foreign Exchange. As we alluded to in the beginning, developments in geopolitics, the world economy, and the aftermath of the COVID-19 pandemic created a bundled sense of uncertainty in the financial markets. The E.U.’s compounded economy and its euro have significantly weakened. This ongoing process made it possible for the U.S. dollar to catch up to full equivalence, which has not been done since 2002, twenty years ago. This strong performance of the American currency made even retail raise their attention, looking for strong opportunities to engage. Where Forex has gained traction, other assets like stocks and real estate have weakened. The reason is, again, rising instability and insecurity in the respective markets. Less people choose to enter these for fear of miscalculation.

Commodities can be traded and invested in via Forex, as well. Whereas crucial ones like natural gas and crude oil have constantly risen in price. One of the aspects for crude oil to explode in value being the OPEC countries not yielding to the U.S.’ demands in significantly upping monthly production. Whereas natural gas was priced at 43.99 USD in June 2020 and went up to 483.23 USD in June 2022—an increase by 998.49 per cent. Only through Forex could one have taken advantage of a ten-fold, dramatic price movement like this.

Forex - among the best types of investment

Since investments can be legitimate sources of passive income, let us have a rundown of the most solid and relevant assets that can serve as investments - especially, as they relate to Foreign Exchange. Gold is a historically proven type of investment—a magnificent long-term hedge against inflation, it has a strong track record. The downside is probably its physicality: unlike with Forex, gold needs to be stored somewhere safe and robust. The more one has, the more storage and safety becomes an issue.

Much like gold, real estate is a heavy-duty path to making an investment. The advantage is security and relatively low price volatility. Also, the owner can rent their real estate, by which they generate passive income in a straightforward way. Forex does not cover these options but does have a significant advantage elsewhere, though. The initial investment doesn’t have to be as high as it usually needs to be, acting on the real estate market. With Forex, sums between 20 and 100 USD are usually sufficient to start participating in the Foreign Exchange market.

Cryptocurrencies have been the most recent addition to the financial markets. All thanks to bitcoin, which, despite the ongoing downtrend, did manage to convince many financial legacy institutions—and even governments—to become investors in the past two years. Since crypto is prominently present in the Forex domain, many of the advantages of both worlds merge. Crypto trading has benefited from Forex-inspired security measures like stop-loss orders and negative balance protection.

But there are high risks involved with cryptocurrencies in terms of investing. Individual crypto projects can say one thing but do another. As the Celsius network and its CEO, Alex Mashinsky, have painfully demonstrated this summer. Most clients of their financial service have most probably lost all their funds.

Things are a little bit different with the algorithmic stablecoin project Terra Luna, which allegedly imploded because of a grave, but unintended technical miscalculation of the development team. Instances like these are extremely rare in Forex, since the currencies and commodities traded there are historically reliable assets that are well-equipped against sudden defaults.

Saving accounts and cash savings have their merit in times of economic stability and thrive. But in the age of inflation, these options can become a bottomless pit in no time. Forex is much more mobile and flexible in that assets can be swiftly exchanged, whereas the other two more pragmatic options are more static in nature. Saving accounts, in particular, since the contract signed with the bank can have many sorts of disadvantageous clauses in case of wanting to close it prematurely.

Stocks have their upsides in a bull market, as well. Especially if you nailed an investment like, say, buying stocks in Amazon pre-2016. Stocks actually give an individual proportional ownership over a company - the more stocks in their possession, the more of the company belongs to them.  As for now, though, the stock market is in a steep decline. It is hard to ascertain the midterm outlooks or how long the downtrend will continue. The dynamic nature of Forex, on the other hand, gives the investor many short-term options to modify their investment portfolio on the run.

The pressure of certain governments on the whole domain of private investment cannot be overlooked. Constant restrictions—like the Forex industry is experiencing at the moment—while at the same time government policies are lacking to adequately meet grave dangers like inflation, may all lead to people losing their income and savings.

It doesn’t have to be this way

How can someone break free from this vicious circle, take responsibility, and engage in a meaningful, productive and potentially very lucrative investment decision? Let us take Forex as an example again. A trustworthy and reliable broker is the first and foremost step. Any broker with at least a decade of experience in the financial markets (such as OctaFX, XM, eToro) is a solid pick. Attention has to be paid to the broker’s reviews and awards. All of that should be available to research online.

In terms of achieving financial goals, there could not be a time filled with more urgency than now. Taking the dire economic crises raging worldwide into consideration, the investment decisions one makes now could dramatically influence their future - for the better.

#source


RELATED

To Become a Great Trader, You Must Avoid These 18 Trading Mistakes

Have you ever wondered what helped all those professionals of Wall Street become successful? You will be surprised, but the key to their reached heights is hidden in their mistakes...

Most liquid currency pairs: how to trade them

Let’s delve into the captivating realm of trading highly liquid currency pairs, exploring the ebbs and flows of when these pairs experience a downturn or an upturn...

Is Forex More Risky Than Crypto?

In the ever-evolving financial markets, forex and cryptocurrency trading stand as two distinct realms, each offering unique opportunities and risks...

Market sentiment: the faceless swarm

Market sentiment can be likened to the wisdom of the crowd, but is there any wisdom present? Do the masses consuming social media and affiliated news really know better...

The Importance of Fundamental Analysis in Forex Trading

In this article, we discuss the importance of fundamental analysis in forex trading and provide an overview of some key economic indicators.

Common Stock Market Myths

Trading can be a daunting endeavor for anyone, even without the added misconceptions and myths of the stock market. There are many reasons that people disregard the financial opportunities...

What Is Margin Trading And How Does It Work?

Investors trading in the financial market commonly face issues with equity, which creates difficulties in conducting operations with currency pairs and other assets. This lack of equity is primarily due...

The Role of Traders and Investors in the World of Finances

In the realm of finance, two distinct yet interconnected entities hold significant sway: traders and investors. Often, these terms are used interchangeably...

Understanding Lot Sizes: Balancing Risks and Rewards in Forex Trading

The trading arena operates in a complex ecosystem that is constantly balancing between potential gains and inherent risks. At the core of this delicate equilibrium is the crucial concept of lot sizes...

Unlocking the Secrets of Trading Success: Is There a Magical Formula?

Have you ever contemplated whether trading is your true calling? Perhaps the more pertinent question is: are you suited for trading? Is there indeed a magical formula...

Top 10 Greatest Traders of All Time

Let’s chill from charts and read about the world's greatest traders who affected markets and left a mark on trading history. Not everything is simple about traders’ success but also about the hundred of past losses...

Account takeover is on the rise: how to protect yourself

Everyone has a friend who has been subject to account takeover attack. With 24 billion exposed accounts available online, this type of identity theft is now rampant in the digital domain..

The Complex Landscape of Day Trading: Navigating Challenges for Renewed Success

Day trading, a realm of financial endeavor, is akin to navigating a turbulent sea where the promise of treasure is counterbalanced by the threat of tempests. The industry reverberates with tales of acclaimed day traders and hedge...

MetaTrader 4 for Android

The forex market is the most active financial market in the world. It is also the largest. Managing the intricacies of trading in this market requires skill...

Is a forex hedging strategy effective?

Forex hedging is a risk management strategy that offsets potential losses by taking opposite positions. It involves placing trades that serve as a safeguard against adverse price movements...

Navigating the Transition to Full-Time Forex Trading: Is It Feasible?

The allure of replacing a conventional full-time job with forex trading has captivated many, driven by tales of significant income boosts and flexible lifestyles...

Comprehensive Guide to the Top Copy Trading Platforms in 2023

Copy trading is gaining traction among traders as an innovative way to leverage the expertise of seasoned players in the financial market. By mirroring the trades of successful traders...

Mastering Asset Correlation: A Key to Successful Trading

In the complex world of financial markets, success hinges on more than just intuition; it demands an intricate understanding of how different assets interact...

How to grow from newspaper seller to MT indicator creator

Are you trying to find motivation and change your life? It's a sign for you to start acting! If a boy from a large, almost penniless family managed to live a better life...

Mastering Bond Trading in 2023: Strategies and Insights

Bonds, often known as fixed income securities, remain a fundamental financial instrument for both governments and corporations, allowing them to raise capital for various projects and operations...

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.