TMCnet Feature
October 20, 2020

Trading and Investing - What's the Difference?

There is more than one option for making money in the Forex market. The most common practice is to buy undervalued assets and resell them after the price rises. This type of activity is called currency speculation.

To get profits in this way, you need to learn how to predict the exchange rate and its behavior. If an asset is expected to rise in value, you should buy it to profit from the resale when the price peaks. In the opposite case, the currency must be sold. Finding an undervalued or overvalued asset, opening a deal to buy or sell a currency and close it in time is the job of a trader. It involves active participation and an in-depth understanding of what’s happening in the market. Let's figure out how to make money in Forex and what is the difference between trading and investing.

Key Features of Trading and Investing

Once you have access to the vnfbs site, there are several ways to create passive income on the Internet with investments in the foreign exchange market.

#1 - Investing in Experienced Traders

Required skills: minimal knowledge of trading. It is perfectly enough to understand how the market works to properly evaluate the risks.

Starting amount: from $10.

PAMM investing assumes a bilateral relationship between a trader who trades and earns as well as an investor who invests money in a trader. The first one accumulates investors' funds on its account and trades on Forex with their help. The latter invests money and receives a certain percentage of profit in the event of a successful trade. As a rule, the profit is split 50/50 or 70/30 in favor of the investor.

#2 - Long-term Investment

Skills required: Minimal knowledge of currency pricing. Basic skills of working with the broker's trading platform.

Amount to start: the minimum amount is enough to open a dedicated account with a broker (from $1).

Long-term investing is another great source of passive income on the Internet. Everything is simple. You open an account with any Forex broker and buy any asset on any trading platform. Physically, of course, you will not receive it, but you can make money on the change in its value over time (in a couple of months, quarters, or even years).

#3 - Automatic Trading

Required skills: you need to understand the principles of the Forex market, know the basics of technical and fundamental lookup, and have experience in independent trading in the foreign exchange market.

Starting amount: from $10.

Automatic trading is the process of making money on the Internet with the help of robots; passive income is provided by special programs that trade instead of a person. The principle of opening deals by an advisor is incorporated into its algorithm.

It is often said that automated trading is suitable for beginners, but this is not entirely true. To make money by trading robots, you need to understand the logic of opening trades, know when automatic trading becomes unsafe, understand when to stop/cancel the deal, and when it is better not to enter the market.

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