How Does Foreign Exchange Trading Work?

According to Alan Safahi, a leading San Francisco startup founder, advisor, and entrepreneur, foreign exchange trading, also known as forex trading, is a global marketplace that focuses on exchanging currencies against one another and involves the relative value of one specific currency over another.

Research conducted by Alan Safahi of Orinda, CA highlights that forex markets are the largest and most liquid asset markets worldwide due to streamlined trading, commerce, and finance. The foreign exchange market has a colossal amount of liquidity, enabling people to actively trade trillions of dollars every trading day. In today’s article, we will discuss how foreign exchange or forex trading works? Read on!

Currency Value Measurement

A currency value is analyzed and measured through the amount of another currency it can purchase. The process is known as the price quote, which contains two prices: a bid and ask. People use the “ask price” when buying a currency. Likewise, traders use the bid price when selling currencies.

Bear in mind that a financial instrument’s ask price is usually higher than the bid price, meaning a bank purchases your currency at slightly lower prices. In contrast, the bank will sell it at a higher rate. Safahi advises traders to learn the basic and advanced concepts of a bid and ask price to measure currency value.

Liquidity Analysis

According to Safahi, liquidity refers to the activity levels of the market. Traders determine liquidity by analyzing the number of traders who are actively trading and measuring their total volume.

Because forex trading occurs 24/7, it is the most liquid market in the world. More liquidity means tighter spread, which favors everyone. Because trading is ongoing, traders can conduct it smoothly with plentiful liquidity. However, Safahi advises traders to keep an eye on price gaps to evaluate significant price shifts over the shortest periods.

Placing a Buy Order

Traders must focus on forex mechanics. You can trade at the click of a mouse on any trading platform. For instance, you will place a buy order on the USD/EUR currency pair and use a portion of funds from your account to buy the pair’s base currency. For example, you will buy the USD and sell the pair’s quoted currency, the EUR.

You will place the order with the broker, market maker or communicate with the Forex Interbank Market directly. Remember, the interbank market has big players. Safahi states that you can place orders to sell currencies that you don’t own.

Close the Order

Depending on your trading strategies, you will wait until your purchased currency has increased value relative to the sold one. When you are satisfied with the accumulated profit, you will close the order.

Likewise, the broker will perform the opposite transactions – selling dollars and purchasing euros. Bear in mind that you can also place a sell order to reverse the process. Understanding these concepts is essential for beginners to streamline their trading.

Final Words

It is often confusing for beginners to understand the concepts of buying and selling in foreign exchange markets because, in every trade, traders exchange one currency for another. It means there is always a “buy” and “sell” in every trading process.

Should You Own Your Own Investment Bot?

Investment Bot

Investment bots are automated trading systems with designs based on machine learning algorithms. An investment bot allows you to establish rules and regulations for trade entries and exits. After programming or owning an investment bot, the computer will execute entries and exits automatically. 

According to Alan Safahi, a San Francisco-based entrepreneur and founder of 6X Startup, over 80% of shares traded on stock exchanges come from investment or trading bots. The question is: should you own an investment bot? We will answer this question in today’s post. Read on!

Advantages of Owning an Investment Bot 

Safahi has conducted substantial research on investment bots and trading systems. Alan Safahi says investors and traders can use investment bots or systems to turn precise entry, exit, and financial management rules, allowing computer systems to execute, monitor, and analyze the trades. Here are a few advantages of owning an investment bot. 

Mitigated Emotions 

The biggest advantage of investment bots is emotion minimization during the process of trading. You can easily stick to the plan when you keep your emotions in check. Because the system automatically executes trade orders after it meets specific trading criteria, you can save time, effort, and avoid questioning the trade. 

Backtesting Efficiency 

Backtesting is a crucial concept that focuses on applying trading rules to previous market data. As a result, it helps you figure out the viability and feasibility of your investment. Because an investment bot can’t make guesses, you need to program it and set specific rules. 

Next, you have to test the system based on historical market data before investing your money in live trading. Backtesting via an investment bot enables you to assess and fine-tune your trading idea, analyze risks, and determine profitability. 

Enhanced Order Entry Speed

Safahi states that an investment bot responds quickly and efficiently to stock market changes. Owning such a trading system means automatically generating orders immediately after the bot confirms meeting the trade criteria. An investment bot gets in or out of the trade efficiently and on time, making a massive difference in outcomes. 

Diversified Investment and Trading 

An investment bot allows you to trade multiple accounts simultaneously, which creates a strong hedge against losing positions. Because you can’t execute or trade multiple accounts manually, a programmed bot can perform the execution within milliseconds. The bot can scan for investment opportunities in diverse markets, generate orders, and analyze trades to keep you updated. 

Disadvantages of Owning an Investment Bot 

Although there are various advantages of owning an investment bot, Alan Safahi’s thorough research shows several downsides of such investment systems. Continue reading! 

Network Failure 

A trade order usually resides on a computer system and not a server. However, this depends on the trading platform. If your investment bot loses connection to the internet, it won’t send the order to the market, causing discrepancies between theoretical trades and real trades. That’s why Alan Safahi suggests investors must expect a learning curve when operating investment bots. 

Over Optimized Programming 

Over-optimization can lead to unsophisticated operations in live trading. Because the bot is programmed or trained and tested based on the historical market data, it may not predict the future trading parameters. In such a situation, you can readjust your bot and focus on other parameters to create a viable plan. However, Alan Safahi says an investment bot is sometimes prone to failure when applied to a live market.  

Final Words 

Investment bots are automated systems that offer various benefits to investors and traders. Alan Safahi argues that investors must not consider bots as substitutes for careful trade executions. Although server-based bots can reduce mechanical or networking failure risk, one must not completely rely on them. 

Why Entrepreneurs Should Plan For Failure and Not Success

Entrepreneurs

A lesson every entrepreneur learns: “Hope for the best but prepare for the worst”, failure is nearly inevitable for many entrepreneurs. It’s just a channel to the route to success. Every successful business has, at one point in time, failed. So tell me why you are scared of failure when you need to focus on using it as a platform to get better, and learn from your mistakes. Alan Safahi, a fintech CEO says, “Don’t view failure as the ending, rather view it as the beginning of your business.”

Always plan for the worst scenario when it comes to doing business. This makes you plan for the potential obstacles that lie ahead, such as intellectually, emotionally, and financially. Planning to fail and thinking to fail, however, are different concepts entirely. Planning to fail is being practical and makes you aware about every possibility that may occur. This will even gear the entrepreneur up to work. Thinking of failure is like conceding without even trying. This might lead to a decrease in growth, discouragement, and give room for doubt, according to Alan Safahi.

Do you wish to understand why it’s necessary to plan for the worst-case? The following tips below explain why an Entrepreneur plans for failure and not success.

It Ensures Progress: Having planned for failure makes it easier to move on with the business. It does not make you take things personally, which might occur if you have not planned, and were faced with sudden news that could be difficult to handle. Entrepreneurs should face situations as they’ve expected because they will be prepared ahead of time, but if he/she has not, it will come as a shock and affect team morale, efficiency, and psychology. I know you don’t want this to happen. That’s why you plan for failure, to ensure the progress of your business. Know that failure is part of the game you opted in, and, who knows, It might serve as a platform for something far more significant and better.

It Helps To Get Rid Of Fear: Most of the time, the fear of failure holds us back from exploring different opportunities and leads us to stick to our comfort zone. Once an Entrepreneur makes a plan for failure, it gives him/her the confidence to make potentially risky decisions.

Sense of Direction: Planning for failure gives you the room to double-check a decision you intend to carry out, thus giving you a path for redirection. Planning for failure provides clarity on issues that might go wrong, or have gone wrong in the past.

Planning For Failure Gives You Strength: Failure can indeed knock you down, but it can also be used as a tool to help get you back on your feet. It makes you feel stronger and builds you instead of tearing you down. This is why Alan Safahi believes that you should plan ahead, and plan for failure as an entrepreneur instead of success.

Conclusion

The journey from success to failure and failure to success is not an easy one at all. At the same time, dealing with failure in the wrong way will also keep you away from success. We need to resiliently accept failure sometimes, to learn from the situation and make ourselves stronger on the road to success.

Planning for failure as an entrepreneur, and not for success, is a plan for strength, a sense of direction, and the removal of one’s fear. Lastly, it’s a plan for progress.

How CRM Analytics Work

Preamble

  • CRM analytics tells you whether or not your customers are reached by the sales and customer service team and provides you a better understanding of your customers
  • They enable you to understand the behaviors of your customers and the success rate of your campaign(s)
  • They provide an indication of the success rate of the business. 

This articles was created for any business owner or potential business owner that wants to know how CRM analytics work:  

Meaning of CRM analytics

CRM provides the data that explains the performance of your company and the effectiveness of the customer service. It also gives excellent data on the behavior of your customer so as to facilitate decision making. 

In practice, CRM software is used to get the CRM analytics and make all the processes of data collection easy and effective. 

Importance of CRM analysis

According to renowned entrepreneur and business advisor Alan Safahi, the main benefits of CRM analytics are to make appropriate decisions in regards to your customers and make changes in the area of customer service appropriately. This can be achieved through:

  • Evaluation of customer service: CRM analytics will tell you more about the performance of your customer service. The figures will guide you on how to do that and the right direction to channel it.
  • Precise data on the customer: Irrespective of what you will be using your customer data for, CRM analytics will provide you with accurate data. 
  • Proficient lead generation: CRM analytics will better outline the efforts leading to sales. It enables you to choose the areas to improve on that are leading to sales and to avoid efforts on the areas that are leading to double sales. 

Types of CRM analytics to track

Alan Safahi believes that, although there are many variables that CRM analytics measure, these are the most important ones:

Before sale CRM analytics

Of course, your customers buy from you only after they have learnt about your product. This means that most of the interactions occur even before sales.

  • New leads: The marketing department may likely spend lots of energy sending proposals or calling the prospective customers, therefore tracking such activities will be worthwhile to see which of them leads to a purchase. 
  • Prospects: Check the activities of your sales team with the prospects. 
  • Website engagement: Most of the CRM programs will tell you who visited the website and the activities they performed. These are great data to use to make an informed decision. 

After-sale CRM analytics

  • If you have impressed them and they are buying from you, there is no assurance they will continue to buy. It becomes necessary to get some after-sale information. 
  • Problem tracking: Have proper documentation of what your customers said about your product. If they raised any problem, solve them and this will keep them coming back. 
  • Additional purchases: if you sell them products and they buy some others from you, then it’s an indication that of product correlation that may come in handy for future marketing efforts 

Other Data to Analyze are: 

  • Purchasing patterns
  • Segmentation
  • Spending
  • General project management

Verdicts:

CRM analytics is an efficient strategy to ensure the prosperity of business. It gives reliable data on the success of several efforts and the possible changes and directions to channel them. 

Lifestyle Startup Founder

Starting anything at all is not an easy task, it gets even more difficult when you’re starting a business which is an endeavour that takes a lot from the startup founder. 

A few things are expected to change such as routines, schedules amongst others. Many startup founders do not realize early in their journey how much their new business is going to affect their lives and they are often not prepared for such changes. There are therefore a few things startup founders could learn to improve their lifestyle.

One of the most important things an entrepreneur should learn very fast is time management. More than anything, you would have to spend more time working than you probably have been accustomed to. If that is going to be the case for the next few years, you should be getting prepared for some lifestyle changes.

The first thing you should learn as an entrepreneur is that you could be working round the clock. Many entrepreneurs find out that they are working almost throughout the day. A new idea could pop up in your mind at 2am and it could be 6am before you turn off the lights again. You have to get prepared for more work. You should study the experiences of other entrepreneurs such as Alan Safahi, a six time startup founder to understand what you are up against. 

For a startup founder, learning how to say no could be a life-saving skill. You have to realize that you cannot attend every function, you cannot be at every brunch, you cannot attend every meeting. These meetings are indeed sometimes, very crucial for networking and of course, business growth. That is why you should be able to determine which ones require your physical appearance more than the others. If not, you would find yourself socializing more than you are actually working, which of course, is bad for business.

 On the other hand, you could learn to delegate if you can. If you already have team members or a partner, it would be such a great idea to learn how to transfer some of the work or outings that do not necessarily require your personal touch to them. 

You should also know that stress is likely to set in and you definitely should avoid that as much as you can. Stress is bad for business. Sooner or later, it would start to take its toll on your effectiveness at work. 

A startup founder should learn to be part of a community. There is no need to isolate yourself or your business from other people who are also entrepreneurs. There is so much to be learnt from a community of startup founders who have gone through what you are going through now or even have the same experiences as you at the moment. Apart from experiences, startup founders can access funds when they are part of a community. 

If only for encouragement, apart from the network, being part of a community is good for an entrepreneur. You can join communities where you can learn from business experts like Alan Safahi

Startup

Also, as startup founders, trying to nurture a new business, there is often the huge temptation of neglecting some other areas of life. Learn to fight that temptation as hard as you can. Connect with the people in your life and do not cease to enjoy life itself. 

Finally, you must be prepared to not get paid for a long time. “To a startup, cash is like oxygen” says Alan Safahi.  “You have to be very diligent with your expenditures including but not limited to what you pay yourself and your co-founders and early employees”.  

Most startups run out of cash and fail while trying to achieve product / market fit.  It usually takes 3x as much time and costs 3x as much as expected so it is very important for startup founders to conserve cash as much as possible.  

This bootstrapping period could last anywhere from 2-3 years so preparing ahead of time and lowering your personal overhead and financial commitments can make this period a lot less stressful.