Recently, I’ve noticed more and more people around me studying forex investing, and many ask me how to make money by buying and selling foreign currencies. To be honest, the trading volume in the forex market is indeed astonishing, with over 6 trillion USD traded daily worldwide, far surpassing traditional investments like stocks and bonds.

The core of buying and selling foreign currencies is actually earning from the exchange rate spread. Simply put, the spread is the difference in the exchange rate of the same currency at different times or through different channels. I’ve tried several methods myself, from low-risk bank fixed deposits to high-risk leveraged trading, each with its own approach.

Let’s start with the safest method—foreign currency bank deposits. This has the lowest threshold and the smallest risk; just open a foreign currency account at the bank. Many Taiwanese prefer to deposit USD or South African Rand, mainly because of high interest rates. However, it’s important to note that the U.S. is currently in a rate-cutting cycle, and the dollar may face depreciation risk, so I wouldn’t recommend heavily going long on USD right now. Fixed deposits mainly earn interest; if you want to profit from the spread, this method isn’t very suitable.

If you want to earn from the spread more flexibly, consider foreign currency funds or forex margin trading. Currency funds are medium risk, combining currency and investment instruments. For example, if you believe the yen will appreciate and Japanese stocks are cheap, you can buy yen-denominated Japanese stock funds, profiting from both exchange rate movements and stock price changes.

Forex margin trading is a high-risk but also high-reward approach. The biggest advantage is leverage, which can amplify gains, often ranging from dozens to hundreds of times. I’ve seen people make several times their investment during the yen’s big rally using leverage. Additionally, the bid-ask spread in margin trading is much lower than at banks—banks usually charge over 0.3%, while forex platforms often have spreads under 0.01%. This saves a lot of costs for short-term traders.

Regarding trading strategies, I’ve summarized a few common ones. Range trading is suitable during sideways markets, buying low and selling high between support and resistance levels, but strict stop-losses are essential; otherwise, a breakout can lead to heavy losses. Trend trading involves capturing clear upward or downward trends, which usually last longer and tend to be more stable once established.

If you prefer short-term trading, day trading might be more suitable. This approach relies on news-driven movements, such as central bank decisions or economic data releases, which often cause sudden volatility. Catching these moves can yield quick profits. My tip is to act swiftly and decisively—don’t hesitate, or you risk turning a short-term trade into a long-term loss.

Swing trading falls between day trading and trend trading, combining technical and fundamental analysis to identify signals like breakouts or trend reversals. Position trading involves holding positions long-term without frequent operations, but it requires finding low-cost entry points.

Why do so many people choose to buy and sell foreign currencies? First, because it’s widely used—travel abroad, online shopping, international trade all require foreign exchange. Second, the overall direction of the forex market is relatively easier to grasp; understanding interest rate policies and monetary policies of relevant countries can help predict currency trends. Third, the forex market has extremely high liquidity, operates 24 hours a day, and is less susceptible to manipulation by major players, offering high transparency.

Regarding trading hours, banks generally operate from 9 a.m. to 3:30 p.m., with weekends and holidays off. However, forex margin trading doesn’t have a centralized exchange; it’s divided into four trading sessions—London, Sydney, Tokyo, and New York. Due to overlapping hours, trading can essentially be continuous 24 hours a day.

In summary, there’s no fixed “best” way to profit from the spread; the key is to choose methods based on your risk tolerance, trading habits, and capital size. As long as you study the forex market diligently, you can find opportunities suited to you. It’s recommended to practice with a demo account first, hone your skills, and then trade with real money once confident.