Investing in currency

why not invest in foreign currency? some currencies bounce up and down at the same lows and highs each year. if you bought 1 million worth of currency at 4.0x, wait for it to drop to 3.5x to resell it, youd bring in 142k of profit, around twice a year. am i missing something here? why is this not a good idea

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profit by selling lower?

if you buy a currency worth 4.0x the usd, with 1 million dollars, youd have 4million of that currency, if you sold that currency when it drops to a 3.5 exchange rate per usd, youd end up with 1,142,800 usd, which is a 142k profit.

where can I read about this?

You can, but currency trading is a zero sum game.

There are reasons to consider it as a hedge, but if you, as joe investor gets into it, you're going to lose, and lose badly.

There are people smarter than you with better info than you that are making money off idiots like you all the time.

What happens when your currency bet goes the wrong way?

You're fucking retarded.

If you buy it at 4.0X and sell it at 3.5X then you lose 1/8th your cash. You'd actually be at 875k, you twat.

explain to me how im fucking retarded instead of calling me retarded you fucking retard.

there are currencies that bounce at the same lows and highs every year. for the past 10 years. it wont be any different next year, its hard for the currency bet to go down when you know what the usual high is

he just did retard

Do the fucking math. 4,000,000 becomes 3,500,000 which becomes 875k

HURR DURR WHAT IS FIFTH GRADE MATH.

These things follow what is called a 'random walk'

What that means is looking at the chart of any past currency or equity provides 0 predictive power about what it's future holds.

Furthermore most standard economic theory about exchange rates (purchasing power parity, etc etc) has been proved empirically wrong time and time again.

no. lets say 1usd=4.0abc
1 million usd=4million abc

now you have 4 million abc

now wait until 1usd=3.5abc

since you have 4 million abc, and 3.5abc=1usd, if you sell 4 million abc at that exchange rate you end up with 1,142,000 usd.

>There are reasons to consider it as a hedge, but if you, as joe investor gets into it, you're going to lose, and lose badly.

This totally, FOREX trading has to be one of the hardest things to trade.

if you want to try your luck find a sim online.

THAT IS NOT HOW IT WORKS.THAT MEANS THE CURRENCY WENT UP. FOR FUCK'S SAKE. THE CURRENCY DID NOT DROP, IT ACTUALLY GAINED VALUE AGAINST THE USD.

FUCKING THIS IS WHY YOU SHOULD NOT DO THIS TRADING.

okay so the currency went up, but you have 4 million of that currency now, so since it is more valuable, and you trade it back to usd, you make a profit you fucking retarded nigger.
are you actually retarded? or pretending to be retarded?

let me explain this to you as if youre a 5th grader.

you have 1 million usd.

you buy 4 million abc with 1 million usd at the exchange rate 1usd=4abc

you now have 4 million abc

you wait a few months for the exchange rate to become 1usd=3.5abc
this means that 1abc=1/3.5usd=.2857usd

4 million x .2857= how much? 1,142857 usd, you fucking retard. god fucking dammit i cant believe i had to actually explain this shit to you what are you fuckin 16? did you graduate college? or even high school for that matter you poorly educated loser mother of fuck.

if invested 1 million in 4 million worth of abc, you would want to sell abc when it increased in value; buy low, sell high.

If you buy a currency worth 4x the dollar with 1mil you would have 250k of that, not 4million

And this is why you should just buy blue chip us equities and hold them for atleast 10 years with dividend reinvestment before you even consider selling

when either the dollar loses its value or abc gains value, correct. so is this not a bad idea? the only thing im worried about is what are the laws surrounding this? can you send 1 million to a foreign bank account? what fees would there be for this? would i have to pay taxes on this?

Forex is the most brutal market there is. It is dominated by big players making automated microsecond trades on 1/10000 of a point.

You would do better to flush your money down a toilet.

what do you mean sell it short

except nobody uses 1 million usd to buy 4 million abc. they leverage 1 million usd and buy 20 million abc and hope to fucking god it doesn't change to 1:4.1

like if you had invested 1 mil in british pounds after the brexit vote and waited until the pound rebounded to sell? just create and account on Forex, deposit your shekels, and start buying. i don't know what your tax rate will be.

>What that means is looking at the chart of any past currency or equity provides 0 predictive power about what it's future holds.
Fundamental Fag detected

>some currencies bounce up and down at the same lows and highs each year

Show examples.I'll give you the benefit of the doubt. Maybe you're the first person who said "hurr durr I see patterns in the market that nobody else does" who wasn't a total fucking retard.

>OP is the most dangerous kind of idiot, the kind that actually thinks he's smarter than everyone

>Fortunately, OP is only risking his own money. He will only remember his wins and continue to think he's smart, despite losing dramatically in the long run

>Professional traders thank you, OP

How do you trade currencies, anyways?

I want to buy some Sterling while it's still the latest meme

Nope, when value of your currency drops you lose money.

Guys wait, I got it!

youtube.com/watch?v=jE3kikVbaeI

You open a trading account with a Forex broker.