Success built on hard knowledge
After a year of trying and testing different ideas on how not to lose money when exchange rates fluctuate a lot I have drawn the following conclusions:
- Don’t listen to bank specialists. They are minding their own business, not yours.
- Don’t waste your time wondering if the currency exchange rate is at a good level today or not. You are not a fortune teller.
- Don’t freeze your capital, you have to trade it.
- Don’t make the customer pay for your incompetence. If you raise your prices you will become less competitive.
- Hire professionals who understand your business processes. You will find a platform for conversation where common goals are set.
And the key conclusion:
Calculate, monitor, manage, measure – the currency position in your company. Without good input data for decision making, you will become a speculator who occasionally gains but more often loses.
It has been a very interesting 2 years in my business. I lost 135,000 in the first year to make up almost all of it in the next year. Thanks to proper management I know exactly
– how much my company has lost or gained today on changes in exchange rates
– how much I can gain or lose today by deciding to hedge my open currency position
I measure and manage and it happens semi-automatically.
What about in the future?
I am on my way to automating the whole process. I want to make decisions during the weeks of the due dates. I want to make optimal use of instruments for hedging currency risk in order to achieve a high level of security and at the same time not lose the opportunity for periodic additional profits when the exchange rates move in a favorable direction.
I am working on algorithms that will generate a set of actions to be performed (currency exchange, use of a specific hedging instrument, shift of hedging) from the input data such as: sales invoices, purchase invoices, market analysis, historical analysis, owned hedging portfolio, seasonality of business.
I am on my way to construct a tool that is not on the market and that will achieve international success.
In 2017 I founded the company ExChord and in it I am working to ensure that companies operating in foreign currencies do not lose money when exchange rates fluctuate strongly !!!
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