How to Trade Currency

We all know when you go on a trip to another country; you need to take some travelers checks and some cash in the currency of that country. This can be advantageous because one country's currency is usually worth more or less than the other. So your 100 USD could be worth 130 Canadian dollars, giving you more purchase power.

Currencies of countries rise and fall in valued over time, similar to the stock market. The reasons are usually economic and political. You may think though that similar to the stock market there is a lot of money that can be made by trading currencies from various nations. You would be right.

The first step in How to trade currencies profitable would be to find your broker. You can trade currencies at a bank but you will usually find their prices to be high and their responses to be slow. If you are serious about currency trading you really need to find a good broker. Shop around; there are many large and small firs that deal exclusively with foreign exchange. Fees and responsiveness are the big factors here; depending on how fast you are trading a few minutes can really make the difference here.

Another thing that should be understood that this will take a good amount of investing initially (depending on what type of return you're expecting) and usually is not a quick return on your money.

Let's take a look at the Japanese yen for an example. At the start of the year each USD was worth 102 Japanese yen, but six months later each USD is now worth 112 Japanese yen. So if you were in Japan and in January had traded your currency with USD and today were to trade the currency back, you would have received a ten percent return on your money.

Some people think this is a little slow for that type of return. These are generally the types of investments banks and large firms are dealt in. Most individuals prefer the stock market because it is a quicker buck. But currency exchange is a lot more secure, the currencies will always be around, and when investing a large sum of money can return quite well. Trading currency should be a pat of a well diversified portfolio.

Another tip on how to trade currency is to pick only a few types of currency and trade between those. It is much easier to keep an eye on a few nations than a dozen. And since political and economics shape the value of a currency it is usually suggested that you keep an eye on basic news involving that nation. This is the reason it is usually suggested to pick nations and currencies that mean something or are of interest to you.

With a little political insight and some well planned moves you can make significant money in currency trading. Happy Investing.

Eric Newman is an author for Teanobi.com. All articles may be used and reprinted as long as they have an active link at the bottom pointing to http://www.teanobi.com with the anchored text: Teanobi - Green Tea

In The News:


pen paper and inkwell


cat break through


Day Trading - Moving Averages vs Support and Resistance

When day trading the SP and Nasdaq futures, do you... Read More

Day Trading the Index Futures - How to Judge Good Entries

QUESTION: If the SP futures fall through support and go... Read More

Forex Training: Follow Your Gut or Your Broker

Which way will the forex market move? Do you just... Read More

Why Demo Account Performance Is Often Better Than Real Account Performance

Over the past several years, the popularity of online currency... Read More

The Secrets of the Super-Traders

The first and perhaps most important "secret" is to realize... Read More

Trade Exit - How To Cut Losses And Let Profits Run

Cut your losses short and let your profits run. This... Read More

An Evaluation of the Devaluation

A Minister of Finance is morally right to lie about... Read More

Mechanical or Discretionary Trading - Which is Best?

Discretionary TradingPure discretionary trading will rely solely on the traders... Read More

Where to Get Forex Training

For those of you who are interested in forex trading,... Read More

Forex Made Easy for Everyone

Forex made easy is as simple as you would want... Read More

Forex Currency Trading

It is possible to buy and sell money from different... Read More

ISO 4217 in Forex Trading

ISO 4217 is an international standard describing three letter codes... Read More

Momentum Trading: A Practical Day Trading Strategy to Get Profits from Hot Stocks

Momentum day trading can be extremely profitable when done correctly...Day... Read More

Where is the Market Going?

If you ask me whether the market will have moved... Read More

Forex Options Market Overview

The forex options market started as an over-the-counter (OTC) financial... Read More

Your Mother Could Make Money In Forex Trading

The question would be not whether she could but rather... Read More

What are Your Options Regarding Forex Options Brokers?

Forex option brokers can generally be divided into two separate... Read More

Trading Profitably on the Foreign Exchange Market

You may be asking yourself "how does one begin to... Read More

Internet and Computer Systems in the FOREX Business

With every passing year the interest in electronic trading is... Read More

Sending Signals for Trading in Forex

Forex signals are sent by a forex firm to their... Read More

Forex Trading - Advantages and Disadvantages

What is Forex Trading?Forex, or Foreign Exchange, is the simultaneous... Read More

Forex Scams: How to Spot Them A Mile Away

In recent years, investors have witnessed increased number of investment... Read More

Trade Entry Techniques

Most traders tend to concentrate on pinpointing the perfect entry... Read More

Chinas New Currency Regime

The base unit for the renminbi is the yuan, which... Read More

Money Management, Part 1

There are some common mistakes I've seen traders make in... Read More

Crisis of Confidence in the EU

The European Union (EU) constitution was dealt a double blow,... Read More

The Major Players in the Foreign Currency Exchange Market - FOREX

Since the US dollar is the centerpiece of the market,... Read More

Types of Foreign Currency Hedging Vehicles

The following are some of the most common types of... Read More

The Yin and the Yang of Markets

I am reading a fantastic book on trading, first published... Read More

Stock Market Report: Day Trading or Swing Trading Online? Stock Investing Information

Profitable day traders recognize that momentum trading is among the... Read More

Money Management, Part 2

FEARING LOSSESThere is a huge difference between being risk averse... Read More

Adaptation to the Realities of the Market

Do you think adaptation to the realities of the market... Read More

E-currency Exchange Trading

If you are reading this article you are probably one... Read More