Can You Buy And Hold Currencies?

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Can You Buy And Hold Currencies?


Can You Buy And Hold Currencies like a stock? Does it Happen? Yes! You can buy and hold currencies the same way that you would stocks or other assets. If the currency has a $1 USD value, then it will cost you $10,000 to purchase a million dollars worth of that currency. If your currency grows to be worth $1.05, then it’s now worth five thousand dollars—so each dollar is now more valuable by 5%.

You’re able to trade your holdings in just like a stock, But most never talk about it because normally folks are over leveraged and go for 10-20 points.


Difference In Traders


One of the main differences, is the fact forex has always had a bad reputation because of the folks that sell courses and signal services. But the truth is a bunch of Hedge funds will buy and hold a pair. But Why?


Simple really, take a pair like AUD?USD, this pair will pay a positive swap on the account if you bought and hold. Now while it is not much really (Depending On Your Trade) It all adds up in the end. Same for pairs Like Eur/Aud pays a positive swap on the account to hold short.


Now some will say this is manipulation of currencies, But the truth is it tends to keep some pairs in line. And by that i mean not over valued to much. Each pair does have a center point if you will.

Take for example a ford expedition that is a 2010 and the owner wants 10k for it, Sounds about right? But let’s say the market has gone nuts and now the guy wants 50k for the same ride? Does not make any sense really. Same is true with currencies and stocks and futures for that matter. Eventually, they find a right price for buyers or sellers.

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Now if you are a scalper, then this really does not have any value to you. But with that being said, if you are trying to build a small account. This might be a good strategy for you.

Most scalpers are in and out of the markets with high leverage and get there 10-20 points and call it a day. That is great and hell I have done it truth be told. But no one ever talks about just buying a pair to collect the swap and build the account like banks or hedge funds.


Quick Story


When I first got into trading, I was Trading 3 lots of which if you are new, that is 30 dollars a pip. And one day I was killing it scalping and made around 3500 bucks. But I looked back months later and noticed had I kept my trade going I would Have Make 90k.

So this question you can not over look, what is better? short term gain or long term gain? The only difference in the FX market, is you can get paid to hold.


Fast Markets


Some will say the FX Market is to fast for this, and i say bull…If you look back at any pair you can clearly see a tend. The FX market trends more than stocks, because currencies do not worry about a cheating CEO.

If you Find The FX Market to fast, then my recommendation to you is try scalping as a strategy. If you can make a handful of trades a day, and slow down Then maybe try a long term trade.

While true on the markets being fast, you can still treat it like stocks really, and Know what pairs pay positive swap and negative swap.

Check Swap Rates Here

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U.S. Government Required Disclaimer – Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.