Posted by forex at 6:11 AM
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1. Research the currency of your home country and other world currencies. A currency trader buys a currency he believes will increase in value relative to his home currency, in order to sell the foreign currency back at a higher price and make a profit. If the investment community expects the value of the home currency to strengthen, it may be a bad time to attempt a currency trade.
2. Purchase a foreign currency that is expected to strengthen. Foreign currencies can be traded through online brokers, or physical bills can be exchanged at banks, airports and currency exchanges. If you plan to make currency trades fairly often, using an online trading service is a good choice. Either way, you will have to pay for the exchange through a markup on the exchange rate, or fees for using an online service.
3. Hold the foreign currency and sell it when its value has risen relative to your home currency. The profit you make is the original buying price minus the selling price and all fees. It is possible that the foreign currency will never rise in value past the level at which it is purchased--meaning the investor is either stuck holding the foreign currency or takes a loss when it is exchanged back into the home currency.