If you think one currency will appreciate against another, you may exchange
that second currency for the first one and be able to "stay" in it. If
everything goes as you plan it, eventually you may be able to make the opposite
deal in that you may exchange this first currency back for that other and then
collect profits from it. As a note bear in mind that no dividends are paid on
currencies.
Transactions on the FOREX market are performed by dealers at major banks or
FOREX brokerage companies. FOREX is a necessary part of the worldwide market, so
when you are sleeping in the comfort of your bed, the dealers in Europe are
trading currencies with their Japanese counterparts. Therefore, the FOREX market
is active 24 hours a day and dealers at major institutions are working 24/7 in
three different shifts. Clients may place take-profit and stop-loss orders with
brokers for overnight execution. Price movements on the FOREX market are very
smooth and without the gaps that you face almost every morning on the stock
market. The daily turnover on the FOREX market is somewhere around $1.2
trillion, so a new investor can enter and exit positions without any problems.
