Lets say I have $5 million dollars to spend on foreign exchange, which 4 currencies should I buy out of these:
My aim is to play the part of a currency trader and to trade different curtrencies to increase the value of the currency I am actually holding. I have $5 million USD to spend on the following currencies: (I want to use atleast 4 of them) Euro Pound Sterling Yen Australian Dollar Hong Kong Dollar Franc (Switzerland) Peso (Mexico) Lire (Turkey) Krone (Norway) Rouble (Russia) Rupee (India) Baht (Thailand) I want to make as much money as possible. Which currencies should I buy and why? And when converted back into dollars, how much profit will I make from that currency today. Use todays forex rates March 5th) on this site if needs be: http://www.xe.com/ucc
Economics - 3 Answers
Random Answers, Critics, Comments, Opinions :
1 :
You have to look at the charts between USD and those currencies. Daily, 8hrs or hourly movement. Then you can anticipate the movement and make decision. Check out some providers like saxobank.com.
2 :
This is not a well-specified question.... How long do you plan to hold the currencies -- 5 minutes? 1 day? 1 year? The trading strategy would be very different. If you plan to hold them very short-term, then looking at recent movements is your best bet. However, the longer you plan to hold them, the more you should start looking at the underlyling economic fundamentals in each country -- especially likely changes in interest rates.
3 :
First of all you can keep $4,875,000 of your money tucked under your mattress. The good news with the Forex market is you can trade with leverage up to 400-1. What this means is that you only need to invest $12,500 to control $5,000,000 in foreign currencies. So you would open an account with $125,000 and using a margin of 10% you would only need $12,500 into your trades. The only 4 currency pairs that you should consider are the ones that trade the highest daily volume and are the most liquid. These would be the EUR/USD, the GBP/USD, the USD/CHF and the USD/JPY. The USD/JPY is the most volatile of the 4 so you would trade fewer lots of this pair. The GBP/USD is the next volatile and the EUR and CHF arethe most conservative. Good luck and when you cash in please send me $100 for my guidance to pupp52@yahoo.com. Cheers.
