I’ve spent the past week “out in the trenches”. Pulling back the curtain “just a bit” and hopefully providing short-term traders with a couple of ideas – and the chance to make a quick buck.
For the most part this area of forex trading is extremely difficult, time-consuming , stressful , annoying and for those with little experience – truly a fool’s game.
What I’d like to do now, is take a complete 180 degree turn and take a look at forex strategies and concepts geared more so for the investor.
Let me throw out a quick scenario.
What if I told you that your Canadian dollar exchange to Mexican Pesos is 12.79 ( simply consider a dollar being worth approx 1.27 here ) Not bad eh?
Ok…..so now what if I told you that the “base savings rate” at any of the excellent banks here in Mexico was 3.75% – You starting to get the message?
So what if you could go to the bank in Canada tomorrow and get a loan for 100k ( at near 0% ) Then take “said loan” and convert it to Pesos – and put it in a bank account at 3.75% – with absolutely no risk.
Boom! Forex as investment.
It’s what your local banks are doing hand over fist. It’s called the “Carry Trade”.
It’s not “new” it’s not “sketchy” – It’s a major , MAJOR driver of profit for banks across the planet.
More over the weekend……
written by F Kong