Question

Is it Okay to Speculate on Currency? Yes or no, and why?

Is it Okay to Speculate on Currency? Yes or no, and why?

Homework Answers

Answer #1

It is not okay to speculate on currency, because it adds a very high level of risk to the currency trading. Speculating on currency, can bring gains on one day, but on most of the days of trading, it has the propensity to give losses. Rather, it is good to analyze the macro-economic conditions of the economy, to that a currency belongs as well as strategic analysis of the central banks (Fed in the USA) monetary policy and its stance that will help in gauging the movement of currency and will give better returns in currency trading. Merely speculating without macro-economic support, will only create moral hazard in the trading and bring more losses than the gains.

  

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