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View Poll Results: Is investing in currency relatively low risk?
Yes 3 20.00%
No 6 40.00%
I don't know/care 6 40.00%
Voters: 15. You may not vote on this poll

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Old 2005-12-18, 22:10   Link #1
Stardash
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Join Date: Dec 2004
Location: In the States
Investing in Currency?

According to Yahoo Finance, the Japanese Yen is currently experiancing a 2 year high in relation to the USD.



(It's been dropping this month)

In theory, people would convert to Japanese Yen, and when the amount of yen per 1 USD drops, you make money.

Has anyone had experiance in currency market, and do you think it is more or less stable than the stock market?
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Old 2005-12-18, 22:17   Link #2
NightWish
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That is true in theory, but you have to take into account commission or "brokers fees" and the like... you need to be trading in very large amounts of currency for it to work to your significant advantage. Unless you're an experienced trader and play the markets all the time... in which case risk is your bread and butter
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Last edited by NightWish; 2005-12-18 at 22:25. Reason: 1# Need to learn to spell; 2# and type apparently...
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Old 2005-12-18, 23:12   Link #3
MwyC
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dont forget
to make it worth your while you need to invest THOUSANDS at once
or you will just make a few bucks here and there
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Old 2005-12-19, 00:35   Link #4
Sepiraph
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Join Date: May 2003
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Normally people don't think of buying currency as an investment, but rather they buy to trade currency.

I have a family friend who does currency trading, and although I don't do it myself, he has taught me a few things on it. First of all, before you do any currency trading, read about it first, secondly, you have to realize that currency trading is an extremely volatile endeavour, and thirdly there are a lot of pros and experienced folks out there who are doing it.

You have to know that most people who trade currency study some sort of technical analysis and follow some types of chart/indicators. But even then, ultimately you have to understand the psychology of tradings, which is something that'd takes years to learn.

Anyhow, if you are still interested, there are sites out there that allow you to trade "fake currency" so that you get an idea of how to do the real thing. I'd definitely recommend trying that out first if u are actually interested in currency trading
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Old 2005-12-19, 00:55   Link #5
Avatar_notADV
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Realistically, this isn't a good investment for an amateur. You will get soaked for big fees every time you do a trade - if you're not moving many thousands of dollars each time, your profit will be totally consumed by transaction fees - and honestly, it's more of a form of gambling than investment.

Current market prices generally reflect everything that is known about the countries' respective economies. It's hard to get "inside info" on a national economy! The general fluctuation is due entirely to who's in the market at the moment, and unexpected events can have a large effect on the rate.

If you wanna invest, find something tax-sheltered and get working on your retirement savings, drop it in an index fund and forget it. Nothing has a return so good that it's worth paying taxes on the money first! ;p

If you wanna gamble, hit Vegas. Cheaper, with booze and sexy women.
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Old 2005-12-19, 01:08   Link #6
arias
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Join Date: May 2004
Quote:
Originally Posted by MwyC
dont forget
to make it worth your while you need to invest THOUSANDS at once
or you will just make a few bucks here and there
^ This is right. Currency traders have to trade substantial amounts of money. Although I have an old acquaintance who supposedly has become a millionaire from this activity.
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Old 2005-12-19, 07:52   Link #7
Thyrz
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Join Date: Mar 2004
I wonder if the Indian Rupee would be a good investment.
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Old 2005-12-19, 09:31   Link #8
1.0.7.
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Join Date: Dec 2005
trading hot money issit?
well, i respect that you want to make money, but currency trading is..how should i say this..selfish.
the asian economic crisis in 1997 was believed to be started by some guy my economics teacher mentioned who withdrew his investment in hot money (or something like that, i can't really remember)..causing the entire thing.
and slightly off topic, during 9/11.. a part of new york (guess where) actually went "buy gold buy gold" instead cries for help.
this has nothing to do with the thread, but i hope that it is of some help..bottom line is- if you're gonna make a few bucks here and there, it ain't worth it. if you're thinking of becoming rich on it..chances are you sold your soul
a tip though, go for china.. i'm sure it'll earn you more.
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Old 2005-12-19, 11:55   Link #9
Rurik
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The problem with Currency investing, as some have noted is the fluctuation of the currency value, this market is very volatile, and normally investor do not do this kind of thing, they usually make their investment in a more commercial currency the most common the USD. However it is normally a low risk investment if you know what currency you are buying, and is just for short time comitment.

What people do is buy specific amounts of other currency for short term commitment and /or Payments to international vendors, some say it is less risky investing in the Stock exchange rather that buy thousands of a currency to save it.

Yet, If you have insiders that can tell you how the market will flow you can gain a couple of buck by it, a good example is the country where I’m from, where the currency devaluates often, so people buy large amount of USD, and wait for the currency to devaluate, we are talking about a 2 or 3 point gain.

The problem with this is that when a currency start devaluating in comparison to the USD (USD is consider the world #1 commercial instrument and more than 50% of intertanional comerce is done with this currency) this means that the local commercial value this currency holds is less than before. Even if Yen is having a gain in comparison to the USD, still USD has a much higher commercial value..Heck, it would be less risky to try and do it with Euros due to the fact that Euro is a more commercial currency than the YEN.
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Old 2005-12-19, 15:27   Link #10
Stardash
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So if investing in currency is so risky, I suppose the same can be said for commodities. (Imagine if you invested a small fortune of money in oil before the Hurricane...)

Uchiha_Rurik: However the Euro vs Dollar does not seem to have any short term gain. The Yen however will probably go back to roughly 100 Yen per 1 dollar in roughly half a year, though this is all speculation.
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Old 2005-12-19, 15:54   Link #11
Rurik
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Quote:
Originally Posted by Stardash
So if investing in currency is so risky, I suppose the same can be said for commodities. (Imagine if you invested a small fortune of money in oil before the Hurricane...)
Yeah, but this are outside factors that end up damaging your investing, Currency tends to follow a specific trend, that’s Why I said it is a low risk investment, but low risk, Equal low gains.

Quote:
Originally Posted by Stardash
Uchiha_Rurik: However the Euro vs Dollar does not seem to have any short term gain. The Yen however will probably go back to roughly 100 Yen per 1 dollar in roughly half a year, though this is all speculation.
Yes, but if we only follow how much you get for your dollars you might as well invest in Sterling pounds, That have a bigger spread that the YEN, either way, a low term investment is not bad following the trend of the market, but after you got those YEN, you will have to do something with those..Maybe open a Deposit Certificate, but then we have to see how much you earn on fees for it, vs the fees you get from having a Certificate in USD.
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Old 2005-12-21, 10:18   Link #12
kj1980
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Age: 33
And usually, currency investing makes most money on the long term - if you can read in advance how much it will be a return down the road.

Think about this:
The Japanese yen was static to the U.S. Dollar at an exchange rate of USD$1.00 = 360 yen until 1971. Since then, it has been gaining strength until it hit an all time high of 83 yen per U.S. dollar in 1995.

So, if you changed USD$1,000 into our yen back in 1971, you would've gotten 360,000 yen.

And say you found that 360,000 yen 24 years later and changed it back to the U.S. dollar when the exchange rate was 83 yen per dollar, you would have over USD$4,000.

That is of course not considering inflation in which $1,000 back in 1971 would be as same as getting $4,000 in 1995.
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Old 2005-12-21, 12:28   Link #13
zappater
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Investing in currency isn't worth it if you don't have the will/motivation to learn about it.
I got an advice on this from one of my teachers today, and basicly what he said was, that if you don't want to spend 500-1000 hours reading about it you shouldn't even think about it. You can make some big money from it but then you also got to learn a lot about it.

The risk isn't that big if you are prepaired to take a lose every now and then, how big the risk is depends if you are willing to read and learn about it and if you are able to accept a small lose and go on if you happen to make a bad choice.

Got some tips on things to read up on from my teacher that according to him is very important to know a lot about if you want to make some money from it and not just lose everything you got.

Candlesticks
(Fibonacci Golden Ratios)

Gartleys
Wolfe waves

He also advised Meta Trader (4.0) (a free client).
Well good luck mate.
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