Finance Blog


Compound Interest For Forex And Crypto Currency

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How does a person go from two hundred and fifty dollars to two thousand dollars, twenty thousand dollars, or even two hundred thousand dollars? The answer is simple, and it just takes the proper teachings to enact such configurations. All it takes is the comprehensive ability to understand the meaning of compounding. Now in the stock market compounding is relatively easy to know about, but in the fields of Forex and Crypto Currencies there is a subtle difference. While the stock market works a lot like the Crypto Currency market, the order of business does not usually involve investing in a business system.

Instead the idea of trading Crypto Currencies is done based on the initial and ever changing value system of the alternative coin put up on the market. From the moment the coin releases their ICO, which is the price the start up team behind the coin is bidding out to the public for the first time, all these fluctuations start to happen. This may be a volatile time for investors to cash in easily and speedily, but it is ultimately a risk as well. Because the idea of alternative currency is still fairly new, other than the notorious Bitcoin, many also fail during their initial ICO, and as a result hungry investors walk home with empty pockets. The point is if the ICO turns out to be a huge success, the price of the coin will go up in comparison to Bitcoin, and the money put in by investors becomes compounded with little to no work on the part of the crypto trader. This is how compound interest works for a person actively bartering their money in the crypto world. Forex works slightly different than the budding market of alternative cash. The reason for this is that when a trader sets up an account with a broker such as, the account does things a little more distinctly than an account on Binance for instance. The least one could start off with usually in Forex is $250 dollars, so when it is put into the system and the trader wins about 83 dollars in positive cash flow, the money could be kept in there in order to compound gains even more.

This perpetuates the momentum an investor accumulates, because when the same number of trades are won the next month, the profit comes out to be even bigger, hence the compounding. Forex also carries one more policy, because not only could a profit be collected from an uptrend like in crypto currencies, but the Forex trading systems are made to be profitable when the right direction of the market is chosen. Therefore, a buyer or seller makes money because he or she says one of the global currencies is going to be more valuable, or less valuable than it was an hour ago. If a trader were to attempt this in the coin of IOTA for instance, back when Microsoft ran test procedures with their technologies, by stating that the coin would go down in value by placing their money in the market instead of keeping it in their wallet, they would lose their funds because the crypto market does not do a bid for an up or down trend. So because of these differences, it really is up to the individual to make up their minds for themselves of what will work best for them. Each method has different rules and strengths when it comes to the compounding of interest, and each strategy is no better than the other, because in the end, the choice to make money is up to the investor.

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