What are your views on currency trading?

Any sort of value investing approach in FOREX?

Hey ctejeiro,

Saw your post about forex in the other thread. Like you said it's hard to predict market fluctuations, especially short term. One of the problems with this is that it's hard to stay invested in a currency long term, when it produces zero earnings or dividends, especially holding your money hostage and not letting you invest in other assets as you wait for it to pay off. In this way, it's a little similar to gold.

The "value investing approach" to forex would be looking at macroeconomic fundamentals of countries and trying to predict where the currency will go based on that. For example, if you believe in a structural shift in China as a future economic superpower, you could buy into the yuan, knowing that their government can't keep a lid on currency appreciation forever. That's a play a lot of people are going for. Other people are putting in a lot of money into the Norwegian kroner, Canadian dollar and Australian dollar because of their heavy exposure to global commodity prices, and expecting big returns if commodities demand stays high.

But overall, I still think currency trading is a dangerous area with more than half the investors in it guaranteed to lose money. Are you still forex trading right now ctejeiro?

Yeah, however i am just doing it in a micro account. yeah the problem with trading the fundamentals is that while you could be keeping track of the economic performance of a country historically (based on a pool of economic indicators), and compare that to other countries to get an image of economic conditions, most people don't behave rationally and instead speculate predicting the conditions of a country in the future based on expected events, and the FOREX market has the biggest number of speculators, so sometimes you will see that while the economics are favoring a country people have other expectations and the pair ends up selling lower and lower. also no one has deep enough pockets to buy while other ones are selling and buy at a "bargain price" expecting a return to more normal valuation levels. Technical analysis is a viable approach, but is much to robotic for me... for all those conditions i only keep a very small portion of my money in the FOREX. market, kind of like the speculation portion as mentioned by B.Graham.

Hi all,,
I'm a FOREX trader and be honest I just turned to learn about Stocks Market.. Talking about FOREX, for me FOREX Market is an attractive market .
As I just learned about Stocks Market, Stocks Market is a Long terms Investment but FOREX is not Investment but just trading though can play for long terms. The simple philosophy that I want to share about FOREX Trading is "Buy on Low, Sell on High". Stocks Market is more complicated for me, in Forex market i can do profit trading without making research about fundamental side but in stocks is impossible (I don't know with you).
About risk, I think it just equal with the result.
For me All kind Investment is Profitable, that's just depend on how we can sense the move as many experts
say follow the trend though sometime doing counter-trend also can be profit.
God blesses ,,

I prefer investing in Real Estate and Stocks over FOREX

Based on the movement in the EU, I would not want any holdings in euros at the moment. It seems like there could be at least a partial collapse of the currency.

I think real estate could be at least marginally safer right now than currency. However, I think the profit margins in many cities for flips have been significantly reduced. I can say that rental properties could be a valid option as well for additional income, but I recently have experienced problems in that area as well.

I suppose as long as you are an active trader, there is money to be made in currency swaps. But as mentioned in the Gold thread, you would need to buy in bulk to get any substantial return.