Today you have a possibility to earn a passive income in the Forex market and make money in the financial market without direct participating in the process itself and making trades on your own. In this case a subject acts as an investor and receives dividends as the result of investing own funds. The financial market enables gaining a steady passive income by several methods.
In this case investor selects a trader, who demonstrates nice results in trading, on specialized online services and subscribes to receive trading signals. When the same trader opens a certain position, an appropriate signal will be send to the investor (via SMS message, e-mail or other methods).
The investor ultimately takes a decision on opening an analogous trade on own account. The given type of investment is rather risky, since today you can see many incompetent traders attempting to sell low-quality signals.
Potential profit from this kind of investment might be higher, if the investor can find a truly professional signal provider having a prolonged positive equity curve of personal account. MyDigiTrade platform carries out an independent analysis of trades made by traders from all over the world and allows copying Forex signals into your brokerage account in an automatic mode.
Social trading / Copy trading
The passive investment method is that investor connects to a certain strategy provider in a specialized service and trades of the given provider will be automatically copied into his/her (the investor’s) account. The investor may set up a trade size at own discretion according to personal risk tolerance. All the rest parameters of the trade (Bid or Ask prices, stop-loss and take-profit levels) will be automatically copied into personal account in a real-time mode.
The benefit of copying trades of traders is that investor doesn’t need to pay a percentage of the earned profit to managing traders. Besides, one can invest in various strategies and thereby hit a good level of diversification of investment portfolio.
Forex robots (Expert Advisors)
Nowadays there are lots and lots of Forex Expert Advisors. They represent a program code, which makes trades automatically on a brokerage account of investor in accordance with in-built trading algorithm. Investor needs to install an Expert Advisor in a trading terminal and run it. Afterwards, this Forex robot will automatically open and close trades, when certain market conditions occur.
In this case investor can customize Forex Expert Advisor by himself/herself in a trading terminal by setting up an acceptable risk level, take-profit and stop-loss sizes. In addition, investor can disable a trading robot at any convenient time. This type of investment requires that investor has a clear understanding of the market situation so that he/she can decide on when it makes sense to enable the robot or disable it to avoid excessive risks.
Investment in PAMM accounts is a rather popular way to earn a passive income in the Forex market. This way implies that investor chooses the strategies (traders), which are good for him/her, on a brokerage website and invest own available funds. Relationships between investor and his/her account manager are regulated by a special offer (agreement), where investor’s commission and the manager’s compensation (performance fee) received as a result of earned profit are clearly stated.
If the manager receives 35% of profit under the offer, the investor’s income will amount to 65%. Example: If the monthly profit earned on the investor’s brokerage account is $5,000, the PAMM-account’s manager will receive $3,250.
Profit may be allocated at the stated time (weekly, bi-weekly, monthly, etc.). Managing trader has the right only to manage investors’ funds, but he/she hasn’t a physical ability to dispose of them for personal purposes, for example, to withdraw funds from your account or transfer them to any other accounts.