Posted by forex at 6:39 AM
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How to Invest in Foreign Money
1. Research the currencies you are interested in buying. Some of the factors that influence a country's currency exchange rate are central bank interest rates, budget deficits, trade deficits, gross domestic product and growth rate.
2. Establish a trading plan for investing in a foreign currency. An example is to buy an exchange traded fund (ETF) such as CurrencyShares Japanese Yen Trust (FXY) that trades just like a stock on the NYSE and tracks the performance of the Japanese yen. Another strategy would be to simply buy your desired foreign money at the bank and hold it.
3. Educate yourself on FOREX trading. Foreign exchange trading or FOREX is the most established way to invest in foreign money if you are serious about actively trading currencies.
4. Watch your investments. FOREX trading is characterized by liquidity, so it can be volatile. It is important to watch the daily trades carefully. Know your goals and strategies to make sure your trading isn't ruled by your emotions.