The Unexpected Benefit of Trading Currencies

Today, we’re going to have a bit more fun than usual…

We’re going to talk about currencies, but not strictly about trading.

You see, learning to trade currencies has helped me in so many ways.

Of course, it’s meant a lot to me financially. Currencies have become a very lucrative part of my overall trading strategy.

But there have been many other benefits, too…

One of which is learning a lot more about other countries and their role in the larger global economy.

I like to think of currency trading as though you’re buying and selling shares in the economy of a country. And if you want to understand the specific drivers of that country’s economy, you have to do a bit of research.

For example, the Australian, New Zealand, and Canadian dollars are known as commodity currencies. That’s because each of these countries have significant commodity exports.

Therefore, they can be sensitive to the fluctuations in price of various markets such as oil and copper.

But let’s face it, that kind of stuff can be boring.

The kind of research I really enjoy doing when it comes to other countries is from a traveller’s perspective.

Travel is one of my big passions in life. I’ve always had a sense for adventure, and there’s few things I enjoy as much as visiting other countries, learning more about their culture, and of course, eating their food.

My work as a currency trader has exposed me to so many different cultures and countries over the years. One factor that helps decide where I travel next is the exchange rate of a country’s currency relative to the U.S. dollar.

I always want to visit a country where the dollar is much stronger than the local currency. This means that my money will go further when I travel.

A great example of this is a recent business trip I took to Turkey. Turkey is a beautiful country with wonderful people, incredible natural beauty, and delicious food.

But the best part of travelling to Turkey was that the exchange rate was extremely favourable towards the dollar. Turkey has been in an economic crisis for quite some time, which has destroyed the value of its currency, the Turkish lira.

Just check out this crazy chart below highlighting the U.S. dollar and Turkish lira exchange rate (USD/TRY).

This is practically the definition of a parabolic move.

Ten years ago, one dollar was worth about 1.9 lira. Today, a dollar is worth 27 lira. That’s an increase of an astounding 1,321%.

This means your money goes so much further in Turkey than it would in many other tourist destinations. It’s possible to have a truly luxury travel experience on a budget when you visit the country.

For example, you could easily have an incredible meal for four people and spend under $80. This is in sharp contrast to my most recent trip to Iceland where a few coffees and pastries ran up a total of $44.

As for currency traders, many of them can’t wait for the day this trend will eventually reverse.

If the lira can ever regain some of its former strength, it might just make for one of the biggest trades of all time…

Happy trading and travelling,

Imre Gams

Do you have any travel experiences to share?

Let us know your thoughts – and any questions you have – at [email protected].