What is Forex and How to Invest

Who has never dreamed of having a high financial return on a low investment in the very short term? This is precisely the biggest appeal of the Foreign Exchange Market, or Forex, one of the largest trading markets in the world, which moves about US $ 5 trillion per day. In this post we will talk about the most basic doubts about this form of investment that helps many people achieve their financial independence. Let’s start by explaining what forex is and whether it is legal or not to invest in Brazil:

What is Forex?

The operation in the Forex market consists of the simultaneous purchase and sale of foreign currency pairs (which can be, for example, dollar and euro, euro and Canadian dollar, among many other combinations). The investor gains or loses money with the difference between the quotation of the chosen currency pairs.

As the appreciation and devaluation of currencies fluctuates daily – suffering from the influence of political and economic events – you can achieve a lot of return or loss in a matter of minutes. In a month, the return on investment can be over 100%. But, before venturing into transactions, it is necessary to know this market better to operate with caution.

It is through platforms for graphical analysis that investors evaluate the possibilities of gains. The investment is made through a broker located abroad, in countries such as England and the United States, operating in a perfectly legal manner.

Is Forex legal?

Sending money from Brazil abroad is a legal procedure and these investments are also declared in the Income Tax. Making these contributions legally was only possible with Resolution No. 3412 of 9/27/2006, of the National Monetary Council.

But a lot of attention is needed: when your money is out of the country, it is under the jurisdiction of the country where it is invested. It is important to know the destination of the money being invested, that is, to make sure where a certain agent is located and what type of protection he is offering.

Each country has a body that regulates the financial market, with different laws and different protections. We must be very careful, as it is difficult to identify the suitability of these partners with precision. England, the United States and Japan have stronger legislation that guarantees greater protection for foreign investors. Inspection on brokers is very large.

Unlike Brazil, in several countries this issue of investing in a foreign market is a very common activity and carried out by a large number of investors.