Forex Basics For You 1 - 2 Travel Time!

Now it is time to travel! Say you intend to go from NY to Montreal.
Before board your flight you have to think about your stay in Canada and how you are going to pay for your food and shopping. (For now forget your Amex or Visa plastics.) You carry only Green Backs (US Dollars). But Canada have its own Dollar (CAD) whose value is slightly lower than US Dollar. That means your 1 Dollar US bill is more than 1 Canadian Dollar. So you loose if you pay (US) Dollar to (Canadian) Dollar. What is the option?
You have to 'BUY' Canadian Dollar by giving out (SELLING) you US Dollars.
Where and how?

There are many places you can do. One way is....

As you enter JFK Terminal in New York, you will see Currency Exchanges like one in the picture.[I'm not endorsing any Currency Exchanges or establishments]

Travelex Money Exchange

There you will see a board with different currencies listed with at least two rates against each currencies - Buy rate and Sell rate. 

Currency Exchange Rate Board

Now, we have to look into the rate of Canadian Dollar buying rate. As I writing this post the 1 USD = 1.04 CAD.( USD and CAD are symbols for US $ and Canadian $ respectively).
Hence if you pay USD 1000 to the counter clerk in Currency Exchange, (S)he will give you 1040 CAD!
Wow you made 40 more CAD! Right? Don't get amused.
The difference 40 CAD is because USD is stronger by 4% than CAD. If you didn't get it, wait for the next post to get cleared.

Forex Basics for You 1 - 1

The word Forex is acronym of  Foreign Exchange.

All the countries in the world have their own currencies. Few have common currencies like European Union - Euro. When we exchange (buy) currency of one country by giving (sell) another country currency it is called Foreign Exchange.

How it works?

I'll try to explain with simple example.

If you live in US you pay for your coffee, burger or anything in US Dollar and get back the balance also in same US Dollar. For instance you buy a Double Cheeseburger for $ 5.00 and tender a $ 10 bill, the cashier return back $ 5.00 without any clumsy calculation. Simple ha?

What if you travel to Canada and you buy the same Double Cheeseburger for Canadian $ 5.00 and you tender the cashier 10 Dollar US bill? He have give you the balance in Canadian Dollars and not in US Dollars! Clumsy ha?

This where Foreign Exchange comes into play.

Let us catch up in next post.

Forex Basics For You!

MDEWA56APCSD
Today almost everyone who browse the web knows the word 'Forex'.
But not everyone of them really get what it means and how it works.
If you are one of them and eager know what is Forex and how it works, is it right for you involve yourself, whether you will make money or loose in it, then it is the place where I'm going to explain it all.

I will not write lengthy posts, but small and concise notes that will help you understand the Forex Trading.

Hope this blog will demystify Online Forex Trading.