Thanks for sticking with me folks. I’m on the road and time and connectivity are spotty. I’ll be home tonight and things will hopefully get back to normal. In the meantime this site has had it’s highest single-day readership ever … wow, thanks to everyone for visiting. I try not to flog too many things here on this site, but there is so much interest in this forex … (Foreign Exchange) subject that I thought this course might be useful to some. (Note, no it is not free, but it’s solid info and it is 100% guaranteed, so if you want to learn how money is made in ForEx (and do better than I have been doing "flying blind" you might want to look.)
Some months back my friend Bob posted an article on how we think, currency-wise, while living here in the Philippines. Bob posed the question, do you think in Dollars )or Euros or Pounds or Yen or???) or do you think in Pesos? The answer is quite definitive. Yes!
“What do you mean, yes, Dave”? I can already here a few folks saying … “which one is it”? Well the truth is, you can live say in the US for years and never even give another country’s currency a thought, but if you live here in the Philippines and your income, your savings, your real estate or even just someone you send Christmas cards to are in your home country, you are thinking “foreign exchange’ virtually every day.
Many are going to say, foreign exchange? That’s complex, that’s big money, high-en investor stuff, not for me. It is true that many big market players work the foreign exchange (or forex) market for a source of income. And it’s big, larger by far than any one country’s stock market. The forex market is also the most world-wide .. the forex trading day starts with the opening of the new Zealand exchange (Sunday night US time) and runs until Saturday night US. 6 days awake, rain or shine, almost every day of the year except perhaps New Years.And what does this market do? Easy of course, it changes money from one currency to another, right?
Well, not exactly. Technically there is no such think as changing or exchanging currently. You have currency of one country and you want currency of another country, you sell the currency you have and you buy the currency you want to wind up with. It’s buying and selling, just like stocks or making a living with used cars. The difference between Forex and almost any other market is, you never convert what yore selling into cash and then hand over the cash for something you want to buy … you sell your (for example) US dollars to a currency exchange in the Philippines who buys them from you for an agreed number of Pesos per dollar.
You can make this sort of transaction at almost any bank, at large shopping malls (one of the reasons the SM chain of stor4es is well-liked is they have easy and fast currency exchange windows and they give fair and decent rates, so you don’t have to deal with street vendors and other shady money changing characters (whom I do not recommend). You are always thinking in both dollars and pesos here in the Philippines. Here’s a little practical example example.
A few weeks ago my wife and I bought a piece of furniture. Came up to about P18,000. On the day we bought it, I could have walked downstairs in the mall to my bank and withdrawn Philippine Pesos from my Peso Savings account, or I could have withdraw US Dollars from my Dollar Savings account and sold those dollars for pesos, or I could have done 9as we decided to do on that day) charge the purchase on our Philippine pesos credit card.
Mainly for convenience, we charged it. Now I kept in my mind the fact I needed P18,000 sometimes before the 27th of this month, when the credit card has to be paid off to avoid interest payments. So I watched my favorite tool, Yahoo’s currency page until I judged that the peso was likely as high against the dollar as it was likely to go before the 27th … in other words, when I could buy the most pesos with each of my US dollars. I made the move last Friday, for several non-financial reasons (such as we’re going on a trip for a few days).
Went to the bank, withdrew $1,500.00 US Dollars (I needed Pesos for a bunch of other reasons too) and asked the teller to give me the money in Pesos. I signed two other pieces of paper aside from my withdrawal slip, to comply with Philippine central bank regulations, and my teller handed my my Pesos in short order.
On Friday my bank was offering to ‘sell’ Pesos at 47.905 and so the teller handed me P71,857.5 … a nice healthy stack of P1000 notes … the largest bill in the Philippines. Simple, quick, easy, but profitable? Not very. Check the chart and see where the Peso/Dollar rate was on Monday of that week. I could have gotten P72,607.5 if I had bought Pesos then .. the difference? 750 Pesos. A difference of a bit over $15 USD. Not all that much of a loss, but if you consider that P750 would pay my monthly cable bill and my cell phone bill for the whole month of July, I really timed my move wrong.
A lot of folks tell me, oh that exchange stuff all to complex for me, I don’t even think in Pesos … well fine … everyone should think as they like, but if you choose to live here, you’ll pay close attention to both dollars and pesos .. or your bank account balances will do it for you.
Essentially I have found that in this world you have to learn in order to earn, and you learn nothing for nothing. (Note, no it is not free, but it’s solid info and it is 100% guaranteed, so if you want to learn how money is made in ForEx (and do better than I have been doing "flying blind" you might want to look.)
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Philly,
The other factor to consider is interest rates. In your example, you also have to determine if the interest you would foregoe on your US dollars is less than the interest you would pay on your Peso credit card , in addition to the exchange fees.
I think I would lose my sanity very quickly if every purchasing decision I made in the Philippines involved consideration of exchange (and interest rates). It’s a bit like driving around trying to get the best price for petrol.
I love that analogy, Laurence … yep, how many peoplesay, let’s drive over to the othersid eof town, gas is always cheaper there LoL. When my wife saw the article and the chart she said, “I’m not going to tell you you should have traded on Momday rather than waiting until Friday, but I should have.” How true. how true.
I make sure before I put my credit card on the counter that there is money to pay before the monthly closeout date, because the interest rate on the card is 3.5% .. PER MONTH … Shades of Tony Soprano … or in your case, Underbelly.
The interest on dollar savings right now is something like 0.011% .. so low as to be negigible for the average depositor .. and that is less 20% automatically withheld Philippine income tax. In my passbook (yes we still use them) every month are ll these little 0.00xxx figures for interest earned and taxes paid … it hardly seems worth the calclation. Of course to the bank it certainly is worth it.
Yes Dave I’ve been thinking in pesos for a long time now, where I first came here I think it was 8 P to the $, but a beer cost 75 centavos. When I came back in the early 90’s it was 23 P to the $. When it hit 55 P to the $, I stocked up and built my house, saved about 1 millon Pesos by moving my house fund here and cashing in. When I purchased my land it cost 130,000.00 P (at 31P to the $) The seller’s wife wanted dollars of which I had none with me. Then she pointed out how well the dollar was doing against the dollar, and I agreed and told her that I would comply with her request if she would open her wallet and show me $100.00 US in any form. Then I would know that she purchased her rice in dollars, not pesos. Her huisband stepped in and told her that he and I had shook hands on the price, and I handed over the cash and completed the deal. (The husband and I are still friends)
It’s interesting indeed, the time people hit it well and also when they didn’t. The first time I came to the Philippines … in 1999, the peso was 40 or 44 to the dollar. Later I felt rich when the dollar climbed to 55 or 56, and then ten years later we were back to nearly 40 again … poor as a church mouse. This is one of those things some folks don’t think about in regards to living in a different country … it doesn’t matter if you ‘think’ you are a ‘market player’ or not …you are one.
It’s interesting indeed, the time people hit it well and also when they didn’t. The first time I came to the Philippines … in 1999, the peso was 40 or 44 to the dollar. Later I felt rich when the dollar climbed to 55 or 56, and then ten years later we were back to nearly 40 again … poor as a church mouse. This is one of those things some folks don’t think about in regards to living in a different country … it doesn’t matter if you ‘think’ you are a ‘market player’ or not …you are one.
Exactly. So many people tell me, “Oh I’m not interested in FOREX, I just want to live there”.
Well, if you want to eat, have your lights turned on or have water to fluch your toilet … you know, life’s little luxuries, you need to larn. Living outside your home country, or even being a Filipino and earning money online, makes you a FOREX trader even if you thought you weren’t.
it feel so great
i like it here
How nice to hear things are going well for you. Where, may I ask, is “here”?
hello people, im very much interested in forex trading, ive been practicing in demo accounts for many months now, can u pls give me an advice to where should i go on trading on live account.. i live in the philippines and i wan to know what company or website should i go on live, i just want to go live with very small amount because i want to try my skills first. pls reply
pls tell me also the requirements in opening a live account(i.e credit cards and etc)
Perhaps someone following the blog can help Tristan. Me, I olnly for ForEX as required in real, off line terms, selling dollars for pesos or pesos for dollars. Frankly, there are much better ways to make money online than ForEx trading, I believe, unless you have big money. Many people make a lot of money with ForEx but it is a a gme played with fractions of a cent, so if you don’t have a lot of money at risk, I don’t see how you make much money.
By the way, Tristan, you left the link for a page on GeoCities, that service id discontinued, you might want to find another web host.
ive just checked my site and you are right, thank you sir… and thanks for the tips… more power