How do i make money from the currency exchange?
Tom asked:
I was just wondering if anyone could explain to me how to make money from the exchange market. Could someone try to explain it to me in simple terms, and do they know how easy it is, or what i should do to start making some money. Thanks
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I was just wondering if anyone could explain to me how to make money from the exchange market. Could someone try to explain it to me in simple terms, and do they know how easy it is, or what i should do to start making some money. Thanks
October 10th, 2009 at 5:30 am
Buy the currency when it is cheap, sell it when it isn’t, sounds easy, well………………… noitall Yorkshire England (U.K.)
October 10th, 2009 at 10:17 pm
To make any real amount of money you need a pretty big amount to begin with.
You need two countries with floating currencies. Let’s take Spain and the United States; as the U.S. economy weakens and the European economy strengthens, the dollar loses its buying power (value) while the Euro gains. This means that the Euro can now buy more dollars. Now usually the change isn’t very extreme, but it can be; if you bought the Euro at a 1:1 exchange rate, you’d make a killing now that there’s been a 50% rise to the value of the Euro (it’s now 1:1.5). livelyzombie
October 13th, 2009 at 1:08 pm
noitall in the UK is right, if it were me I would buy US dollars because it is down and it will come back up very soon Don D
October 16th, 2009 at 1:00 pm
to make money from the currency exchange you first need to consider some aspect. first of all keep a watch of the value of the currencies. when the price of a currency (e.g $AU) is low buy a large sum of the money and when you see the value of the money is going up decide when is the perfect time to sell it. Sell when u think the currency has riched it’s maximum value. That way u get a better profit cause u brought the money with low price but sold it for more. Recently the value of the $AU has gone up agains the $US. sooo maby start thinking. dreamland
October 19th, 2009 at 11:34 pm
1) Buy it low, sell it high, or;
2) Be the bank
Seriously, tho, I can tell from your message you have no idea what you’re doing in this area, so the best advice would be to stay out of it. There are millions of participants in the forex markets, most of whom do know what they’re doing, and they want your money. Odds are very high that they’ll get it.
If you INSIST on getting involved in a market you don’t know, tho, there’s only one strategy which is worth pursuing. Most people follow a ‘trend-opposing’ strategy, no matter which market they are trying to trade. This is when you buy something which has fallen in price, and sell something after it has risen. Sounds logical, but it’s a disastrous trading strategy. We’re wired that way, psychologically speaking — we want to buy things which are cheaper than they were, and sell them when they’re more expensive — and it sounds like a way to make money, but it’s not. It amounts to bucking the trend, and what eventually happens is that you buy something which has declined, say, 5%, and it carries right on down, say, 50% more. Now you’re buried.
The only strategy which, when correctly applied, consistently leads to profits over long periods of time is trend FOLLOWing. This is where you buy something which has broken up to new highs, or you sell something which has broken down to new lows. It sounds counterintuitive, but it’s not. When a major high or low is broken, sometimes it’s a pre-cursor to a major move, and this — maybe one trade out of every ten — is where you’ll make pretty much all of your money.
To repeat, I do not consider it wise to jump into a market you don’t understand, particularly when that market is filled with experts ready and able to part you from your money. But if you decide to go ahead with it anyway, at least give yourself the best odds possible, and do it the right way, even tho it sounds counterintuitive.
If you’d like to read and learn about Trend Following, the following books are a great place to start:
Good luck. myersb68
October 21st, 2009 at 8:56 am
If you invest in the US dollar, and then sell it when it goes up soon, you’ll have made a profit. Bob Smith
October 23rd, 2009 at 12:28 pm
say you got 15g’s. you trade it to euro when it first came out.
today you take your 15g’s of euro into usd, its obviously worth alot more now, right? zeph88
October 25th, 2009 at 4:39 am
There are plenty of currency trading engines available on the internet and the sums required to earn an ok return are not tremendously high because you will trade on margin (hence your actual investment is only a fraction of the supposed margin call).
In currency markets you will always trade pairs such as GBP/USD, or EUR/GBP and so on. You can either have long or short positions depending on your strategy, and you’ll have to follow the news very well - especially news on interest rates, trade and politics.
Trading on a margin is very risky so make sure your trading provider (perhaps DB?) gives the option of insured stop loss orders so that you’re not down for several thousands (or millions) in a margin call that didn’t go your way.
In terms of general trends, against the GBP, you’ll probably see USD dropping further and EUR rising. Other than that, since commodities are doing quite well, you might see the currencies of Australia, Chile, Brazil, Norway and so on appreciate against both the GBP and the Dollar. Mike I