Can someone explain currency, and exchange rates to me??!!

[GUA]

Hey guys,

Im not going to lie, I am extremely ignorant when it comes to currency, and finances. I think it would greatly help me as a domainer if I could get to grips with this pressing, and questioning conundrum..

So In my paypal balance I have both GBP (as I am british), and USD (as most domainers sell in USD).

Underneath the individual balance it gives me the approximate value were the money all GBP (using paypals exchange rates).

Now, exchange rates vary, people occasionally say the GBP pound is strong/weak.. etc What does this all mean to me as a domainer?

The basic idea I get is that i could buy something for $600 one month, sell it for $700 a month later, and in terms of value be losing..
I am told that buying in one currency, and selling in another could in itself provide greater profits.

I would GREATLY appreciate it if someone could explain this to me, what currency I should be selling in, what currency I should be buying in, and how I can judge the above to answer my own question as exhange rates change.

Help would be greatly appreciated!

Thanks again
Tom

 

[draggar]

Values of currency flucuate as much as stock markets. I don't know the conversion rates but on day:

Say 0.80 GBP is worth $1.00US one day. That means you can buy a $100US domain for 80 GBP.

Then, the exchange rate changes (inflation etc..). Now, 1.10 GBP is worth $1.00US. Now, if the domain's value goes down to $90US, you can still sell it for 99 GBP.

$US is the value of the domain in US dollars
GBP is the value of the domain in GB pounds
a is the "value" of the US dollar
b is the "value" of the GB pound

The exchange rates are as:
US dollar per GB pound: a/b (we'll call this number D)
GB pound per US dollar: b/a (we'll call this number P)

Now, to convert from US dollars to pounds you'll multiply US$ X P
To convert from pounds to US dollars, you'll multuply GBP X D

The largest factor is the value of one currency vs. another. If you know your stuff, you can make a good living just trading in currencies plus when you throw in a third currency, then it gets fun since it can move in one direction vs. one currency and the other vs. a second.

 

[GUA]

Thanks for the response draggar.
The above makes sense.

How do current exchange rates influence which currency to buy/sell in atm?
Also is there any universal medium to log relative value..
If I buy a name for $100 , then sell it for $110 I could potentially be losing value...
Is there any EASY way to accurately say I bought it at $x so to break even i need to sell it at $y...?

Thanks

 

[Theo]

Check your wallet. If it contains something other than bellybutton fluff and and an old, unused jiffy bag it means you're on the right track to establishing a domain budget.

Other useful links: http://forex.com and http://xe.com

 

[GUA]

Check your wallet. If it contains something other than bellybutton fluff and and an old, unused jiffy bag it means you're on the right track to establishing a domain budget.

Other useful links: http://forex.com and http://xe.com

Thanks for the links.

What should I do about the fact that I sold my wallet to get money to invest in domain names?

Still curious as to an explanation of what currencies to buy and sell in....
T

 

[stewie]

I use American $$$ , odd time I'll deal with different currencies but in general I use American. Most the internet uses or converts to american. If I'm dealing with a Canadian domains and dealing with a Canadian I will work with the Canadian dollar.

JMO

:yo:


*plus you can pick up or download a currency converter somewhere online...incase you need one.

Good Luck

 

[HarveyJ]

XE.com for the win.
https://addons.mozilla.org/en-US/firefox/addon/4817 : Get the FireFox addon for it.
And if you had to sell your wallet to buy some domains, possibly consider getting a part time job...
Going into domaining is a risky business. Payoffs are good if you're smart, but you still want to have s teady and reliable source of income till you get there.
Hell, if relied entirely on domaining for income, I'd be on the streets.