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In Forex trading, you're short-selling one currency and buying another. It's not an investment, it's a pair trade. Nobody buys USD or NZD or any other currency
by arcticbull 5y ago
In Forex trading, you're short-selling one currency and buying another. It's not an investment, it's a pair trade. Nobody buys USD or NZD or any other currency expecting to walk away with more value in the currency itself. You're making money on the divergence or convergence in purchasing power of a currency in one country vs. another.
Your goal is to walk away with more units of your currency than you had to start, not that each of those units will be worth more.
- notch656a 5y ago>you're short-selling one currency and buying another >It's not an investment, it's a pair trade. So borrowing USD and selling it to buy BTC means you're not investing in BTC?
- arcticbull 5y agoHm, that's fair. I guess I could say you're not investing in the currency but rather in the convergence or divergence of their relative purchasing power in their domestic economies. I'm not trying to be nit picky, I'm open to being wrong here.