Total newbie here. I sold my share in my previous company and got just under 100k USD. I used TransferWise to accept the USD and after monitoring the USD to GBP over the past few months wanted to maximise the GBP return. I missed the huge drop in March by a week or so as the sale completed at the end of March.
It struck me that looking at the charts, it should be possible to make money by waiting til a dip to convert to GBP, and waiting til it’s gone in the other direction to convert back to USD, and going on the current volitility of the rate each move could increase the pot by a couple of thousand, potentially every couple of weeks. And if the market doesn’t move in the right direction, there’s no trades, and no loss.
But this appears to be against the T&Cs of TransferWise and Revolut, the other multi-currency account with good rates/low fees. So when I’m looking into the whole new world of Forex, it worries me that people end up losing so much money and blowing their account - when using my method above, there’s no way of losing if you only trade when it puts you in a better position.
Am I missing something? Why wouldn’t I avoid any loss by just keeping hold? Is this something I can do legitimately with a forex platform? If there’s no leverage can you lose money if there’s no date you must convert/trade?
long term strategy is a thing that relates with smart amount of balance , because without smart amount you are not able to depend on long term trading strategy.
Forex trading for private retail traders does not involve profiting from the literal conversion of capital from currency to currency. We speculate on the movement of the exchange rate but no currency conversion is involved at any stage.
I dont get it. How do you know youre getting to a dip. You said if it doesnt move in the right direction, theres no trade. Well what if it moves after you’ve put the position on? Also holding overnight has rollover fees which can be positive or negative depending on the pair and whether you’re long or short. So if youre being charged then you can keep holding but if the market doesnt turn in your direction the swap fees will blow your account.
If no leverage is used, will there still be swap fees?
This is my point though, if I don’t use a forex platform and just keep converting currencies in TransferWise, I can wait until there is say £2k profit before converting the currency, and then waiting again until there’s $2k profit going the other way, if time isn’t of the essence. Isn’t that better than trading CFDs as you wouldn’t “lose” a trade and take a loss?
It involves identifying a trend, then following it for weeks or months. In some cases, traders have followed a trend for over a year. When applying long term Forex trading, traders buy based on expectations, and sell based on facts.
Certainly I would do more research into forex before staking any of that 100k. In forex nothing is risk free until you have a stop loss at the same level or better than your entry
Ah I see what you mean. Yeah it’s not a bad idea And you’re right you wont actually lose any money as you’re waiting for it to return to profit. But you’ll lose other things eg opportunity cost: because your cash is locked up until it turns. But this is not possible using a trading platform. Theoretically you might be able to if you have an Islamic account. They may check to confirm you are muslim first. Also they may have something in their terms and conditions against this too. So you’ll have to check.
Another point I’d add is that holding multiple currencies and converting between them is not subject to capital gains tax or other taxes in the UK since April 2012.
Long term strategy is to keep low leverage as high leverage increases your risks. Raise your capital gradually and work on different indicators. One of the most important is to have patience and control your emotions.
Everyone that trades Forex is trying to buy or sell to put themselves in a better position. Most people lose money trading forex.
There is no such thing as no way of losing if you are speculating on the future direction of currencies.
It doesnt matter if you trade CFD’s with a broker, through a bank or some other transfer service. With leverage or without.
The price is always changing, how can you not lose?
Only if you sell at a better price than what you bought it for.
Holding on (indefinitely) and hoping the price comes back is not, not losing. because it might or it might not. It is either going to be worth more or less than what you bought it for; always.
You can do this with a Forex platform, just buy a lot size that is equivalent to your account balance. So if you have $100K in your trading account. You can open one 1 lot deal ($100,000). it is the equivalent and exactly the same thing as what you are talking about.
Imagine if you exchanged USD and bought GBP in 2007 when the exchange rate was at 2.11. Would you still be holding now at 1.24 and be thinking to yourself I am not losing? How long would you be willing to wait for the price to go back there?