There were wild fluctuations in the currencies last year, so it is not surprising that many investors plan to diversify their money holdings or cover their portfolios. You can do it in many ways, ranging from solutions that are suitable for the buying and operating investor to alternatives more adapted to the active trader. At the passive end of the spectrum, you can simply buy in one of the available currency funds. Some of them offer a single currency – close and loyalty manage funds in euros, dollar, australian dollar and Swiss franc, with the minimum investment at 1,500 £.
There are also managed managed (sterling) managed (sterling) fund. You can use this as an alternative to monetary or cash market funds in your portfolio or pension fund, giving you an international diversification of your cash position. The costs of these funds are generally from 1 to 1.5% per year.
However, while I can see the attractions of a managed fund, I do not see any reason that money monetary funds beating an ETF. Remember that once you paid the commission for the purchase of an ETF, it has a much lower annual charge than a conventional OIC and FNB are available for most currencies. In addition, you can keep FNBs in your main main portfolio. This facilitates the Cross to check your exposure to the currency so that you can diversify correctly.
For more active trading, you will need to understand something about how the currency markets work and what displaces them. You will also have to be a fairly active trader – to be honest, I’ve always stayed active negotiation because I know I can not give my wallet more than once a week.
What displaces the markets? Of course, economic news will therefore have to know in advance the dates of expected ads such as GDP and balance of payments, or inflation. Policy and policies – Elections are an obvious example, but the surveys and internal policy of the Party also displace currency markets. Of course, stock markets and interest rate decisions also have an impact. So there is a lot of data that you will need to be on a regular basis. Do not forget that each currency is negotiated against another, so it’s two charges of information you need – in the United Kingdom and the United States, for example if you are a trading cable (dollar / sterling )
You have various options for currency trading. For example, you can use CFDs or spread bets to take a position on currencies. You can get a huge leverage effect in this way – your position can be up to 50 times larger than your deposit. Or you can decide to go for direct currency trading. Deutsche Bank now offers an online trading platform for private investors, which requires only £ 5,000 deposit to start.
You will always market pairs, of course – dollar / sterling, dollar / euro, dollar / yen and sterling / euro are the most common pairs. You trade in “PIPS” – Penny’s hundredths – so that the infinitesimal changes in the rate you would not even notice when you change holiday money, can benefit you (or of course a loss).