45 Alert! 45 Alert!

[OnMyWay]

Whip out those dollars and change them!  45.06 on XE.com.  Mid-market rates.

 

[Jake]

Whip out those dollars and change them!  45.06 on XE.com.  Mid-market rates.

 

Fullscreen capture 9292014 92017 PM.jpg

Hey Don,

 

I must admit that I know nothing about Forex or any other money market trade.  Can you give us a simple explanation for

dummies like me to understand how money makes the world go around?  What is the minimum (average per month) to

trade, in order to realize a decent profit?  

 

Respectfully -- Jake, still in the barter stage......he, he.  

[OnMyWay]

 

Whip out those dollars and change them!  45.06 on XE.com.  Mid-market rates.

 

Fullscreen capture 9292014 92017 PM.jpg

Hey Don,

 

I must admit that I know nothing about Forex or any other money market trade.  Can you give us a simple explanation for

dummies like me to understand how money makes the world go around?  What is the minimum (average per month) to

trade, in order to realize a decent profit?  

 

Respectfully -- Jake, still in the barter stage......he, he.  

 

 

Jake, I wish I knew as much as you think I do, but I'm just a rate watcher.  The peso exchange rate has a big impact on what grade of rice we can afford, so I watch it closely!   :hystery:

 

I did make a a few trades years ago and actually made a little money, but there are a lot of ways for retail traders to lose money trading currency.  Most trades are done as options, so you risk losing all your investment if the trade goes the wrong way, but get an enhanced return if it goes the right way.   Most who are successful (or claim to be) have a system of some sort (there are many for sale) and they have to be on top of it all the time.  With Smartphones, that might be much easier to do these days.  I have thought about giving it a try again sometime but have not yet.  

 

I remember back in the early 80's getting up at 3 am to see what the $/Deutsche Mark was going to do that morning, and see if I was going to lose my life savings!  Literally.  I was not really into saving back then so it was not a lot!   :)

 

If you ever want to try it out, all of the FOREX brokers allow you to set up a play money account so you can test trade without risking a cent.

 

For now the riskiest bets I make are trading Closed End Funds.

 

I'll bet we have a few FOREX traders here on the forum and it would be good to hear their experiences.

[JJReyes]

The important thing to remember is the Philippine peso has not gone down. It's just the US dollar recently gained tremendous strength vis-a-vis major currencies. With uncertainty all over the world, including Hong Kong, investors are parking their money in the United States. US stocks are already overvalued by 15%, yet the market continues to climb because of the inflow.

 

Add to that the expectation the Federal Reserves will increase interest rates. If you are a Japanese individual or institutional investor, why buy Japanese bonds paying nearly zero interest when US Treasury pays something -- even if it is very little. This is in the billions and tens of billions.

 

Three months or six months from now, the situation maybe different.Those who have US dollars and will need Philippine pesos, enjoy the mighty dollar. In our case, my wife and I originally planned to visit Canada next year. With the current exchange rate, we decided to start driving from Oregon and visit Vancouver, BC in October 2014.

 

My wife and I are likewise planning a trip to the Philippines. The China government issued an advisory that the Philippines is unsafe to visit. The trip cancellation so far exceeds 150,000 visitors. The Philippine resorts are expected to start offering deep discounts. Borocay in particular was hit hard.

Edited September 29, 2014 by JJReyes

[alsuave]

 

I must admit that I know nothing about Forex or any other money market trade.  Can you give us a simple explanation for

dummies like me to understand how money makes the world go around?  What is the minimum (average per month) to

trade, in order to realize a decent profit?  

 

To put it simply, every time you go to the currency exchange booth, you are participating in the FOREX market. FOREX is the largest financial market in the word (it dwarfs the NYSE). When you trade FOREX you are buying and selling money. When you buy the British Pound, for example, you are basically buying a "share" in the British economy. The exchange rate of a currency against another currency is a reflection of the condition of that country's economy, compared to other countries' economies. Forex trading is simultaneously buying one currency and selling another. Think of it as each currency pair constantly being in a "tug of war" with each currency on its own side of the rope.

 

There are 4 ways (that I can think of) to trade FOREX:

1. Spot Market: currencies are traded immediately or "on the spot" using the current market price. The spot market is very liquid, has tight spreads, and is open round the clock.

2. Futures: Futures are contracts to buy and sell a certain asset at a specified price on a future date. 

3. Options: An option is a financial instrument that gives the buyer the right, but not the obligation, to buy or sell the asset at a specified price on the option's expiration date.

4. Exchange Traded Funds: An ETF could contain a set of stocks and currencies and is constructed in such a way that it tracks a certain currency pair as closely as possible.

 

You could open a Forex brokerage account and start trading with as little as $25 (I am not suggesting you do this).

Edited September 30, 2014 by alsuave

[Jake]

 

 

I must admit that I know nothing about Forex or any other money market trade.  

You could open a Forex brokerage account and start trading with as little as $25 (I am not suggesting you do this).

 

Thanks guys, 

 

So keeping it very simple (for simple minds like mine)......let's say that currently the dollar is stronger against the weaker peso.

You need to have 45 pesos to buy one dollar.  And if you have a substantial dollar account, you can buy more weaker pesos

in the hopes that the ratio will go back down to 43 to 1 in the future?  And then you can sell your pesos to gain more dollars??  

 

Is that how it works or I'm totally out in left field, like in the foul line?  Who or what determines the value of a currency - Euro

dollar vs the US dollar for example.  I understand that gold reserves is no longer the standard to determine which country is

richer or poorer?  Is it a matter of perception these days?

 

Again, thanks for keeping it simple guys.  I don't have any play money anyway but I'm always curious about the money market.

 

Respectfully -- Jake with a penny for your thoughts.....he, he.  

[OnMyWay]

Jake, not sure if this is simple but it is fairly straightforward.  Most countries currency rates are set by market forces.  

 

http://www.investopedia.com/ask/answers/forex/how-forex-exchange-rates-set.asp

 

Factors That Influence Exchange Rates
Floating rates are determined by the market forces of supply and demand. How much demand there is in relation to supply of a currency will determine that currency's value in relation to another currency. For example, if the demand for U.S. dollars by Europeans increases, the supply-demand relationship will cause an increase in price of the U.S. dollar in relation to the euro. There are countless geopolitical and economic announcements that affect the exchange rates between two countries, but a few of the most popular include: interest rate decisions, unemployment rates, inflation reports, gross domestic product numbers and manufacturing information.

 

It is possible to manipulate the market if you have enough money, as George Soros did in the 90's.

 

http://edition.cnn.com/2013/05/27/world/george-soros-fast-facts/index.html

[frosty (chris)]

 

 

 

I must admit that I know nothing about Forex or any other money market trade.  

You could open a Forex brokerage account and start trading with as little as $25 (I am not suggesting you do this).

 

Thanks guys, 

 

So keeping it very simple (for simple minds like mine)......let's say that currently the dollar is stronger against the weaker peso.

You need to have 45 pesos to buy one dollar.  And if you have a substantial dollar account, you can buy more weaker pesos

in the hopes that the ratio will go back down to 43 to 1 in the future?  And then you can sell your pesos to gain more dollars??  

 

Is that how it works or I'm totally out in left field, like in the foul line?  Who or what determines the value of a currency - Euro

dollar vs the US dollar for example.  I understand that gold reserves is no longer the standard to determine which country is

richer or poorer?  Is it a matter of perception these days?

 

Again, thanks for keeping it simple guys.  I don't have any play money anyway but I'm always curious about the money market.

 

Respectfully -- Jake with a penny for your thoughts.....he, he.  

 

Jake, only about 5% of all traders actually make money trading the markets and I don't know any that will give you their secret formula, takes lots of years and some tears to finally get there. The Forex market turns over $3 trillion a day, not for the faint hearted and unfortunately has a bad habit of being manipulated which makes it all that much harder.

[jon1]

I think for most of us living overseas we don't really "trade" but rather stockpile for this brief upsurges and get the most converted that we can. This way we save some money when the following month it dips again. 

 

OnMyWay, can you kindly put a hold on the 45 rate for me? hahahahaha 

 

Frosty is right about the manipulation. You will see some wild upswings sometimes. A good example, on Sep 14, it dropped to 42.85 from 43.91 for a day and then quickly recovered the following day. It makes you think about manipulation and now that its up to 45 (2.15 is a tidy profit if you invested a lot on that day, buying USD for future peso buy)

[alsuave]

I wouldn't call "wild upswings" manipulation. More likely the market is reacting to news or a change in interest rates.