How is the Forex market different from the Stock Market?
The Forex market has excellent potential return and liquidity. These two main conditions allow an investor to execute investment strategies with better expectations than other financial instruments.
The Forex market is much more dynamic, liquid and globally operated. It is possible to buy or sell contracts of hard currencies vs. US Dollar, thus enabling the investor to take advantage of a bullish or bearish market, and hedge positions directly or indirectly, increasing the potential return on the investment. It is also possible to take advantage of the interest rate differentials of the countries vs. the United States on a long-term basis.
What is the risk involved in Forex trading?
Every market involves some kind of risk. Before going into any kind of financial operation, an investor should examine carefully whether this risk suits his particular requirements. The main risk of Forex trading is having the market move against an open position. The liquidity of the market and the long market hours allow an investor to liquidate or hedge a position immediately during the time the market is open, even in high volatility periods, thus limiting the negative scenarios
Which are the main evaluation criteria for a possible operation?
1.Risk/reward ratio: The expected reward should fully justify the risk taken.
2.Probability of Success: A position should always be consistent with the long, medium and short-term projections.
How can the market be predicted?
There is no certain way to know how or when the market will move. Both fundamental and technical analysis combined with the analyst’s sentiment are the main tools to anticipate market movements.
Fundamental analysis studies the variables that cause the market to move based on economic, political, social and even psychological factors.
Technical analysis studies mass behavior patterns through the use of mathematical tools and concepts. These are combined through highly sophisticated, usually computer-driven models that identify buy-sell opportunities in the market.
What is the recommended investment amount?
The amount to be invested depends on your investor profile and the blend of your current portfolio: Fixed and Variable return, local currency and hard currencies. We recommend that an investor place between 30 and 60% of his cash investment in variable return investment, and about 50% of his portfolio should be denominated in hard currency. Following these parameters, one of our analysts will design a strategy that satisfies your needs and expectations.
Are you registered under the Mexican law?
We are financial advisors. As such, we do not require license or register to offer our services. Throughout the years, we have fulfilled each and every fiscal and legal requisite applicable.
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