This is a series of articles about The Foreign Exchange Market. You will learn here what Forex is , how it works and how profitable it can be. The whole series contain the following articles . . .
1. What is Forex
2. Technical analysis
3. Fundamental analysis
4. Money management
5. Compound interest
Compound Interest.
As an investor, time can be your best friend once you learn how to use compound interest to your advantage. This is an important aspect of any trading system. Compounding your profits can make you very wealthy and help you increase your investment profits exponentially.
The drawback of this technique is that you may also increase the risk. By reinvesting your gains you may multiply your profits but you can also suddenly lose everything.
I will explain here how compounding can make you wealthy. Also I will describe some of the risks involved. This strategy may be suitable for some investors, but not for all. It is more like a long term strategy. Most traders or investors do not have the patience to undergo these kinds of strategies, but they could be quiet profitable.
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