Trading money on the Markets? Help

[Kastro_316]

Today when i was in my Economics class at college, my prof told the class about trading money. He explained it as if i took canadian money and cashed it for american money when the american dollor was low, then cashed back when it was high. He explained people make a good living off it, but i was kinda skeptical about it???? can anyone help me out?

So in order to do this you would pretty much have to predict the business cycle?

 

[omcate]

Quote from Kastro_316:

Today when i was in my Economics class at college, my prof told the class about trading money. He explained it as if i took canadian money and cashed it for american money when the american dollar was low, then cashed back when it was high. He explained people make a good living off it, but i was kinda skeptical about it???? can anyone help me out?

So in order to do this you would pretty much have to predict the business cycle?

That probably is not a good example. USD and CAD are highly correlated. Currency trades usually settle with two business days, whereas USD/CAD trades within one. I know that a cash settlement team at one of the biggest Wall Street firms hedge the risks for holding all foreign currencies using derivatives, with the exception of CAD.