Imagine that you plan to go on vacation to Europe, where the national currency is the euro. And in your pocket – rubles…. And you are in Paris. On business….
Your actions? That’s right, go to the exchange office to exchange your rubles for European currency!
But your friend is planning to fly to England, his salary is also in rubles, and in England, the national currency is pound sterling. What will your friend do? Of course, he will go to an exchange office to exchange his hard-earned rubles for British pounds.
Your mother decided to fly to her friend in Norway. What is the Norwegian currency in use? Norwegian Krone. Mom’s pension is in rubles…. Mom’s actions are quite predictable – she will go to an exchange office to exchange her hard-earned rubles for the Norwegian krone. But there was no crown in this exchange office – for some reason, they did not deliver. And then, your mother was offered to buy American currency – dollars instead of the Norwegian krone. Mom is in some confusion. “Why?” she says. “I have dollars, but I do not want to fly to America to the promenade, but to my friend in Norway!” And they explain to her: “It’s nothing – you will exchange dollars in Norway at the exchange office for Norwegian krone and enjoy life further….”
And your uncle didn’t fly anywhere he did not intend to, but nevertheless, he also has extra money (though money is not “extra” – it is extra). So, my uncle calculated that the Swiss franc will increase against the ruble, so he went to the exchange office and simply bought Swiss francs for rubles in the expectation that the rate will increase and his ruble savings will also increase. That is, uncle decided to speculate on the difference in currencies.
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