For instance let s assume the value of the euro. Hold onto the foreign currency and track the changes in exchange rates over time.
Making money with currency exchange rates small changes big bucks.
How to make money on exchange rates. Study the structure of the currency market. Currencies always trade in pairs. To make money on this investment the investor will have to sell back the euros when their value appreciates relative to the u s.
If it does you make a profit. Go back to the bank and trade the foreign currency back into the original currency. You buy one currency in conjunction with another in hopes the exchange rate moves in your favor.
If the foreign currency has increased in value relative to the home currency during the time you held onto it you will make money. Currency trading can be done in the spot market or on the futures exchanges. Exchange rates change in very small increments under most economic conditions.
Minus any exchange costs. Spot trading often.