Video 16A Channels − 1 = 3 China's Exchange Rate Dilemma A foreign currency exchange rate is a price that represents how much it costs to buy the currency of one country using the currency of another country. Currency traders buy and sell currencies through forex transactions based on how they expect currency exchange rates will fluctuate. When the value of one currency rises relative to another, traders will earn profits if they purchased the appreciating currency, or suffer losses if they sold the appreciating currency. As discussed below, there are also other factors that can reduce a trader’s profits even if that trader “picked” the right currency.
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What is Currency Trading? For instance, something that many beginner traders struggle with is increasing the size of their trade only because they are hoping to make more money.
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