I am trying to understand the benefits of Forex trading vs buying/selling actual money.
Let’s assume that I have 1000 USD and I buy 100 EUR (actual money) at 1.23 exchange rate. Now I have 877 USD and 100 EUR. I estimate the EUR will go bullish and I will later exchange back to USD with profit. However EUR went down instead so if I try to sell them now I will lose money.
Given that I bought actual euros I can keep them in my account forever without affecting my dollars and exchange them only when the price is right.
If I compare that with opening an EUR/USD position on forex I get that I don’t own the euros so I can’t keep them forever ,without risking the rest of my account, or use them directly.
My current opinion is that Forex positions are more risky than exchanging actual money. But they can be potentially more profitable since I can trade currencies that I don’t “really” have at the moment. I am missing something important here?
Thanks in advance!