Having been domiciled in France for about 18 months now having purchased a property here around 2 1/2 years ago. It seemed a very good idea at the time to employ the services of a forex broker to make sure that the best deal possible from the foreign exchange market could be extracted.

It is also worth finding out what the high street banks can offer in the way of exchange rates, particularly if you are about to make a major expenditure such as buying a house, you never know you may just stumble across a really good deal but experience has shown that it is the forex specialist companies that typically offer the best rates using online foreign exchange trading options.

The reason for doing this should be fairly obvious, when you are exchanging money in the hundreds of thousands then the slightest amount on the exchange rate offered can make a significant difference to the amount of money you have to pay for the alternative currency.

For example purchasing 350,000€ with pounds with an exchange rate of 1.51 euros to the pound is equivalent to £231,788.

Reduce that rate by just 2 centimes to 1.49 euros to the pound and you will need £234,899, a difference of £3,111.

In my view that is a significant amount of money and for the sake of shopping around to find the best deal, which you can easily do on line or over the telephone in a matter of minutes, you could save yourself quite a bit of money.

But even for smaller amounts like ongoing living expenses it is worth using the services of a broker, they can offer different contract types which are described below and typically provide better exchange rates and lower fees than high street banks when dealing in foreign exchange currency trading.

There is a little bit more to it than that of course, it isn't just about getting the best deal from the best broker, it is also about monitoring the exchange rate over a period of time looking for peaks and troughs. To do this you do need to study the history of your chosen currency a little and you will find that there are plenty of websites available that offer historical data online, usually in the form of foreign exchange rate charts plotting rates against time. So if you haven't been paying attention to exchange rate changes it is not too difficult to go back and research the trends that have taken place.

The forex trading brokers provide different options that can help you take advantage of peaks and protect you against troughs in the exchange rate values.

For instance you can purchase a 'forward contract', which can be as much as 2 years ahead, that allows you to make a purchase when exchange rates are favorable and to protect you against downward currency movements.

If you look at the change in exchange rates of the euro versus the pound over the last couple of years, it shows that anyone placing a foward contract for pounds to euros back in 2007, when the rate was around 1.50 euros to the pound, that they wanted to realise now would, in the 350,000€ example, have saved them around £74,000. This is because the exchange rate is at the time of writing sitting at approximately 1.14 euros to the pound.

Hindsight is a wonderful thing, but I am pretty sure that there will be people around who would have seen this coming and done exactly as described, they may not have realised the extent of the movement but would have predicted a downward trend from that peak.

I certainly wish I had placed an order of this type when we first decided to move to France, even for our monthly living expenses and ongoing costs we could have protected ourselves against significant expenditures.

Of course with the exchange rate sitting at the 1.14 level it is hard to see any other trend happening than it going up (well eventually) and so a forward contract now would be likely to be a mistake unless you want to change Euros into pounds of course, nothing guaranteed about that statement however.

A technique you could employ, is to perform damage limitation exercises where the exchange rate is monitored and purchases made when there is mini-recovery that would be sufficient to cover requirements for a couple of months ahead.

A method for achieving this without having to monitor the rate constantly is to place a 'limit order' this is where you can instruct the broker to buy or sell at a certain pre-defined level.

You can accompany a limit order with a 'stop loss order' which is effectively the opposite of a 'limit order' and is used when the value starts to drop and you want to buy or sell when it drops to a certain level.

An example is as follows:

Limit order 1.18 euros to the pound
Stop loss order 1.15 euros to the pound

You can see if the exchange rate is at say 1.16 euros to the pound you will automatically buy or sell if the rate moves outside of the range 1.15 to 1.18. If you are lucky it will be the higher level but you can also protect yourself at the lower end as well which guarantees a minimum rate.

Typically the only other type of order available is using a 'spot contract', this is where you buy or sell currency immediately at the current exchange rate on offer. Literally if you state that you want to go ahead and the metaphorical button is pressed then you are in a legally binding contract to come up with the required funds within the agreed time frame.

Most if not all of these services are available both online or over the telephone, but because of money laundering issues and regulations you do need to register with the broker in order to participate in foreign exchange currency trading so that they can check you are genuine and have a legitimate reason for trading.

Certainly over the telephone you are often asked to explain why you are making a foreign currency purchase, pretty much for every transaction, this has become par for the course and is a matter of routine which you cannot really avoid other than performing the transactions yourself using the internet options most companies make available to you.

If you are interested in registering with one or two Forex brokers you can use this link to review a company I have used extensively in the past and who have offered very competitive rates.

Bear in mind everyones circumstances are different and so then are their requirements, for that reason I would say it is worth checking out a few companies to find the ones that suit you best.