Jul
21
Anyone who reads can tell you that the US dollar is on a bearish - downward - trend compared to most of the other major currencies. The Aussie dollar and NZ dollar are consequently bullish, or rising. The China renminbi is skyrocketing. Even the Japanese yen is holding very steady.
The obvious bet, when trading the US dollar, is to short-sell. Basically, sell high and buy back to cover when it drops in value, over time.
But it’s not a linear fall. The US dollar kinda bumps around, drops for a few days, makes a U-turn, comes back up, occasionally even rises for a while before falling again. As such, any investor short-selling the US dollar must be careful, and watch closely the patterns, to anticipate these bumps before they happen. Short-selling is very time sensitive, and if you do not have the resources to cover your trades if they turn sour, you could lose a whole pile of money, much more that you stand to gain.
Remember, currency rates are not like gravity. Those that rise, continue to rise. Those that fall, continue to fall.
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