Invest your money in Education Savings Bonds

If you are on the internet lately (and you must be in order to be reading this article) then you have probably seen an advertisement for a popular form of trading called Forex trading. Before you jump on the bandwagon and open up a Forex trading account, let’s take a moment to explore a question plaguing many—How does Forex trading work?

What is Forex?

Every country has its own type of currency (although some share, like the countries that use the Euro). Each of these currencies has a value for trade when used within its originating country, but it can also be purchased using the currency of another country - like when you travel to another country and must purchase its currency with that of your own. And while a currency’s value might be fixed in terms of trading it for goods in its own country, it can vary when stacked up against the currencies of other countries.

For example, let’s say that you live in Canada and use three Canadian dollars to buy orange juice every day. If you want to trade those three Canadian dollars for U.S. dollars, you might get four U.S. dollars on Tuesday, but only three and a half on Wednesday if the Canadian dollar falls or the U.S. dollar rises. But no matter how many U.S. dollars you can get for your three Canadian dollars, you can always buy the same amount of juice in Canada - unless the store raises its prices.

Capitalizing on Value Variances

When people trade equities, they attempt to buy into the equity (or stock) at a low price. This means they buy 100 shares of XYZ stock for $X. Their goal is to hold their 100 shares of XYZ until it reaches a higher price and they can sell it for more than they bought it for. Forex traders have the same objective, but they want to buy and sell currencies instead of stocks. This is another useful tip on how you cand invest your money. Check our blog Invest money for more interesting articles in finance.