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While it may be accurate to surmise that the forex market is shrinking, it remains a vast and extremely lucrative entity. According to the Bank for International Settlements, for example, April saw the foreign exchange generate an average daily sum of $5.09 trillion, which is an incredible amount for a single, financial vehicle.
In fact, the gradual decline in daily forex trading volumes has much to do with diversification within the financial market, which has created a larger number of potential vehicles and available derivatives. While these may vary in terms of risk and reward, they enable investors to create more balanced portfolios that are less reliant on volatile markets such as the foreign exchange.
Mental and Practical Tools That You Need to Succeed as an Investor
Given the emergence of increasingly diverse and balanced portfolios, investors are required to possess an incredible wealth of knowledge, technical tools and a varied skill-set. While some of these elements are unique to specific markets, however, others are universal and integral to long-term success as an ambitious investor. For example: –
1) A Sense of Determinism
Aside from theoretical market knowledge, a keen sense of determinism is arguably the most important skill for an investor. The reason for this is simple; as while there are numerous market and macroeconomic factors that can impact on investments there are also underlying laws that govern change in the financial realm. Determinism can enable investors to keep these laws in mind at all times, helping them to maintain a consistent and informed strategy that delivers actionable results.
2) Online Trading Platforms and Analytical Tools
In terms of practical tools, it is almost impossible to trade in the modern age without access to an online brokerage platform. This not only offers you real-time access to both simulated and corporeal markets (including everything from forex to indices), but it also includes a host of additional resources such as analytical tools, live news feeds and historical price charts. These resources are invaluable, particularly as you look to manage multiple investments, assets and derivatives within a single, overarching portfolio.
3) Economic Calendars and Calculators
While both economic calendars and financial calculators can sometimes be accessed through online trading platforms, they should also be considered as single, stand-alone resources that can help you to make informed investment decision. Economic calendars include every data release and major, macroeconomic event that is scheduled throughout the year, making it easy to forecast certain trends and make strategic trades to suit the market.
Similarly, tools such as a basic fx calculator can be leveraged to determine currency and exchange rates, which is crucial for anyone who invests in international markets and derivatives. Some of these calculators can also perform multiple equations in real-time, ensuring that you can operate strategically across all of your asset classes.