A Practical Demonstration of whenFX for a July USDZAR Invoice

In this article, we'll explore a real-life example of how whenFX operates on a USDZAR invoice for the month of July. whenFX consists of two key components: a forecasting algorithm and an exchange timing system. By examining a USDZAR invoice that needed settlement by July 31, 2023, we'll demonstrate how these components work together effectively.

It's observed that clients with foreign invoices, even if they have 60 or 90-day terms, often delay payments until the contract's end. Usually, about a week or two before the invoice due date, they start reviewing exchange rates.

Let's consider a scenario where you have a foreign invoice of $150,000 due by the end of July. At this point, you would likely begin monitoring exchange rates from Monday, July 17, 2023, which is 15 days before the payment due date. The Rand was trading at R18.07/USD.

Now, if you had utilized whenFX, you would have waited for 10 days before settling the invoice. This wait would have given you R64,500 more in your bank account at the time whenFX provided the payment message.

Here's a breakdown of the process:

1. Entering the invoice details in whenFX: whenFX would have informed you that you desire a lower price and have 15 days remaining until the payment is due. The number of days left is crucial as it influences the exchange timing system. whenFX employs four forecast timeframes, and based on the forecasts and the number of days left, it guides you to the appropriate timeframe for monitoring.

2. Initial Action Message: The system would suggest switching to the D1 timeframe and keeping a close eye on it. D1 is the longest of the four forecasted timeframes. On July 7, 2023, the down arrow indicator appeared at R18.77/USD, indicating market control by sellers and an expected Rand strengthening. You could then continue with your daily tasks, receiving email or sound alerts from whenFX if any action was required.

3. Switching Timeframes: As the Rand continued to strengthen, by July 25, a different message would have appeared, advising you to switch to the H4 timeframe, as you now had less than 7 days left until the invoice due date. The subsequent action message would instruct you to keep monitoring this timeframe, as the long-term chart was no longer the correct one to observe.

4. Identifying Trend Changes: On the H4 chart, a down arrow appeared on July 24, 2023, at 12:00, at R18.02/USD. This downtrend continued until July 26, 2023, at 12:00, at R17.64/USD when an up arrow indicator appeared. Your action message would then have changed to switch to the H1 timeframe. On the H1 timeframe, an uptrend was observed, and the action message would be to switch to the M15 timeframe. The M15 was also in an uptrend. So, on July 26, 2023, at 12:00, at a rate of R17.64/USD, your action message would read: Execute the transaction NOW!

5. Executing the Transaction: With the favorable rate of R17.64/USD on July 26, 2023, you would promptly contact your broker or use your online platform to make the payment.

In summary, by monitoring the invoice from July 17, 2023, with an initial rate of R18.07, and executing the payment on July 26, 2023, at a rate of R17.64, the invoice value decreased from R2,710,500 to R2,646,000. This smart timing resulted in having an extra R64,000 in your bank account.

whenFX proves to be a powerful tool in optimizing your transactions. Don't hesitate to subscribe now and benefit from its capabilities.