Most high street banks offer little or no help when it comes to exchanging your hard earned income. However, there are a number of simple tools freely available to everyone to help you keep track of changes within the currency markets and remove risk. Here are our top 5 tools to help you exchange currency!
1. Rate Alerts
Make sure you don’t miss out on significant movements within the currency market by placing rate alerts above and below the current market rate. This means you can receive a text and an email whenever the currency market is moving positively; providing you with an opportunity, or negatively; helping you limit losses. It can also help as an early warning sign of major news events that might be impacting the currency markets.
2. Limit Order
A limit order enables you to automate an exchange at a more favourable exchange rate. Once you have chosen an acceptable rate and the amount to convert you can leave an order running without having to constantly monitor the market. If the exchange rate moves to the desired level (even for a few seconds in the middle of the night), your exchange will execute automatically.
3. Stop Loss Order
This can be used as a safety net to automatically convert your funds at a worse case exchange rate. Often used in conjunction with a Limit Order, it is a useful tool to limit your losses while keeping the door open for improvements for as long as possible.
4. Forward Contract
A forward contract allows you to budget for future exchanges. If you know how much and when you are due to receive funds you can fix an exchange rate ahead of time to remove any nasty surprises and take advantage of positive early opportunities. They normally require a 5% deposit but this is refunded once the deal is settled.
5. Regular Payment Plan (RPP)
Utilising forward contracts can then enable you to secure a rate for multiple dates. Often used to secure a rate over a number of months a Regular Payment Plan can give you the ability to secure the exchange rate for your monthly income up to 2 years ahead of time. Unlike a single forward, these can often be setup without a deposit.
How to navigate using these tools!
It is worth speaking with an independent currency broker as they can help you utilise these tools to make the best of your situation. We can put you in touch. Their services are normally completely free of charge and they will take time to understand your specific requirements and priorities. They can then provide bespoke solutions, saving you money and time while reducing your risk.
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