Everyone gambles. They thrill at taking small risks that can lead to winnings, large or small. Gambling is always a risk, but you can control how much you are willing to win or lose. We can look at dabbling in the forex market or foreign currency exchange as a form of gambling. You decide when to buy and what to buy (place your bet) and depending on where the currency roulette wheel stops, you sell at either a profit or a loss (win or lose) at the close of your trade. Let's take a closer look at the forex market at the most basic level.

Currency trading is one of the few investment strategies that can be realized without a broker. All you need to do is go and buy a foreign currency which you believe is going to increase in value in relation to the currency with which you are paying. Remember, in forex trading there is always a "spread". The spread is the amount of difference between the buying price and the selling price of a currency. also, the cost of conversion from one money to another may need to be taken into account which may widen the spread in your case.

For example, in Argentina in the year 2000 then peso was equivalent to the US dollar. One peso bought you one dollar. In reality, to buy a dollar with a peso the transaction may have been

1 ARS =.9975 USD

and the reverse might have been

1 USD =.9970 ARS

So the spread would be 1-.9975 + 1-.9970 =.0055 on each buy/sell transaction. That assumes everything is static and does not change which just doesn't happen in a money market.

Around that time, Argentina had an economic crisis and was dealt a swift blow. Within a year the value of the peso dropped like a rock against other world currencies. Within a few days, the value was set at 1.4 pesos per US dollar. How would that affect your position if you had just bought dollars and not closed your deal yet?

Say you bought $2000 USD. You paid 1.0025 per dollar or $2005 ARS.

Then after a few days you decided to sell your dollars. Now the rate for selling is 1.40 and a bit for the spread. So you would receive:

$2000 x 1.4003 = 2,800.60

In just a few days you gained over $800 pesos on your transaction.

In those same few days you could have lost the same amount if you had bought pesos with your dollars! But luckily, you had reviewed all the economic factors in Argentina together with the political issues at the time, right?

You do have some assistance out there to help you analyze your choices in forex trading. You can use a dealer to broker your transactions and use the information they supply you as part of their offering. You can search for a recent analysis of the countries you feel may offer a profit. Also, your strategy may be dictated from your readings of a forex forum that has given you good tips in the past.These forex forums often offer free advice from professionals. Whatever your strategy, make the best of it! Play the money market and good luck!