Author Bio

In the last 6 months would you have rather have been a trader or a traditional investor? By traditional I mean being long-only securities. That answer should be easy, as trading would have provided far more opportunities and been far more interesting than the fear that gripped the long-only community.

Let’s quickly look back at how this year started. The 2nd half of 2009 saw risk being rewarded as stocks rebounded from their panic lows. EUR/USD hit a low of 1.24 in March of 2009 and wound up trading above 1.50 late in the year. That optimism carried through as 2010 was underway, providing for more gains in stocks with the Dow Jones trading above 11,200 in April. The currency markets were starting to show some strains in that optimism as EUR/USD would be back trading in the 1.30s in April. This is what I refer to as a gap in the risk correlation. Meaning that EUR/USD was headed one way and stocks another. To me this is a signal; others will say that the correlation is weak. Whether or not this is a signal is for you and ultimately the markets to decide.

The optimism really started to show strains late last year when Dubai had their own debt crisis, but in hindsight that fear was almost laughable as to what was going to happen in Europe. Still, it wasn’t until a seven day span in April that saw both the BP Gulf disaster and Greece debt debacle take center stage. The rest is well-known, as neither hole has been plugged yet.

Fast forward to today and that optimism has been swept to the wayside. There are still a few bulls out there, but their correlation to managing long-only portfolios is usually very high. From Obama’s inability or even lack of interest in creating jobs, to China’s negative economic news post the G-20, to the fiscal austerity measures in Europe, the reasons to be negative right now are rising.

This begs the question, though, is all the negative news already priced in? If you are a contrarian, you have to sense that opportunities are ahead. Usually when everyone is on the same side of the market, the probability of a squeeze rises. Still, if Obama is already in November campaign mode as he continues to blame the prior administration for everything, and Europe and China are no help, then being a contrarian at this point might prove to be a pricy proposition.

Let’s just look at the last 3 years to see what opportunities were in the EUR/USD market. Below is a table showing some typical prices from each month.

The table shows that from 2007 to 2009, there were equal or more opportunities in the 2nd half of the year than there were in the first – and the first half of the year was no laggard for traders!

History does repeat itself (Dow Jones 10k is one example). History has proven that opportunities lie ahead and my guess is that the second half of the year will prove to be just as opportunistic for currency traders as the first half of 2010 was.

This report is for your information only and does not constitute investment or business advice or an offer to buy or sell securities.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

This past Monday a financial channel was discussing the currency markets. They were running a bearish story on the euro and highlighted how one particular fund manager was expecting EUR/USD to start heading towards parity. One manager alone doesn’t stand out in the largest market in the world, but the thrust of the report was focused on the challenges that the Euro Zone was going to face and had to be considered bearish.

On Tuesday, that same financial channel ran another story on the currency markets. This time they catered to the euro bulls, stating that most currency traders were expecting the US dollar to stem its gains and start to reverse course. Did this financial channel bother listening to their report on Monday? One of their reports has to be right, right?

This is no way to enter a trading day. Certainly markets will zigzag throughout a trading day, leading to counter-trend trades but understanding the underlying market trend should prove to be helpful as you enter each day. Conflicting information will often times lead to poor decision making.

Let’s return back to Tuesday morning: there was a story on the wires that the Confidence Board revised lowered their April economic reading for China. This is no small deal; in fact, didn’t China just come back from the G-20 meetings touting their strong growth strategies? The Shanghai Composite lost 4.3% on Tuesday and global equities all followed lower. It seems as if Tuesday had turned into thought-reversal day.

Wait though, because there was yet more to come on Tuesday. A meeting with the boss should be no big deal. A meeting with the boss who proclaims afterwards that things are OK is a worrying sign. Apparently President Obama receives a daily update from Ben Bernanke on the state of the US economy. But on Tuesday, after the meeting President Obama, found it necessary to state that things are OK in front of the microphones. Just making sure that we all heard him in case you missed the FOMC or G-20 meetings last week, where both individuals were telling us how good things are right now.

This also happened to be approximately 72 hours before the US NFP report is to be released. Expectations are still for a loss of 110k jobs. The last time the president spoke ahead of a NFP report, he stated how “strong” it would be and then we were all left with crumbs – the creation of forty one thousand private sector jobs to be precise. If I can read between the lines here, it seems as if the president received the jobs number on Tuesday (the BLS takes the surveys in the week of the 12th each month and tabulates the figures in the days that follow) and it was not good.

Americans do not agree that the US economy is OK right now. This was evident in the June Consumer Confidence reading that came out on Tuesday. The Present Index fell to a miserable 25.5 reading. Not good.

Nobody said that currency trading would be easy, especially when you hear flip-flopping information on economies of China and the US, not to mention that the financial channels delivering the news are anything but consistent as well. Understanding the underlying trend will help you become a more consistent currency trader. After all, we need someone to be consistent around here.

This report is for your information only and does not constitute investment or business advice or an offer to buy or sell securities.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

As we enter the 2nd half of the trading year, expectations in the G7 economies are low, very low.  I’m not just talking about the World Cup either, but expectations for job creation and economic growth in the world’s largest industrialized countries.  The G-20 meeting this weekend, if it did anything, reinforced those expectations. Europe and the US could not fully agree on how to stimulate their economies, while China went home knowing that they outwitted their Western peers.

It’s not just me stating this; it’s the markets’ interpretation as well.  On Friday the US 2-year yield closed at 0.65%.  The US 10-year yield happened to close above 3%, but it has been knocking on that 3% door for some time now and one has to wonder if a poor NFP report this Friday will be the catalyst for a move below 3%.  If you consider a general rule that yields should reflect economic growth and inflation, then there is little to rejoice about ahead.  Interestingly enough, AAA-rated 10-year municipal bonds have an average yield of 3.13%, only slightly higher than the 3.11% Treasury yield. The worries over municipalities have been spelled out quite clearly ever since Warren Buffet’s testimony on Capitol Hill a few weeks back.

Click on the chart below of the US 2-year yield, courtesy of the Wall Street Journal: 

The time frame covers the last year and you can see that the current yield is matching the lows that it set in late November of last year.  By the way, the MACD did a nice job of calling that bottom – as it did again this past March – although it failed in late May a few weeks ago.

I am not suggesting that you start trading the 2-yead bond, nor am I trying to offer investment advice.  As a currency trader I am pointing out the amount of volatility that remains ahead.  How would you characterize the month of June so far in Forex – choppy?  I just pointed out that the MACD in the 2-year failed for the past month. Any coincidence?

How about Forex trade this past April and May, when EUR/USD traded down from 1.35 to 1.22, which was an optimal market for trend followers.  Back to the chart above, the MACD also shows a trending market as the MACD line crosses the signal line. Thus the correlation between the two markets was high.

Although you may not trade other markets, you should be aware of developments that will impact the currency markets.  Of course it would be best to pay attention to interest rate differentials and not just the change in nominal yields, but this is one place to start. 

Now for the volatility ahead, do you think that the 2-year yield will remain at 0.65% for long?  Expectations are low for Friday’s NFP report. In fact, at the time of writing the consensus is calling for a loss of 110k jobs.  Given the standard error in NFP forecasts, look for fireworks to return to currency trading in the not too distant future.

This report is for your information only and does not constitute investment or business advice or an offer to buy or sell securities.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

There’s been discussion around trading for a living going on in the Currensee forum area. It’s not the first, of course, and it certainly won’t be the last. A recent informal pool on BabyPips indicated that more than half the folks there have it in mind to replace their jobs with trading (it also indicates that something like 75% plan on making at least 50% per year on average, so take it however you like). I’ve written on this subject before in my own blog in the post Trading for a Living vs. Trading for Wealth Building, and others as well.

The question “Should I quit my job and trade full-time?” is one that was answered by several experienced traders and market pros in the recently published New Trader FAQs book. A common thought from those answers is that trading for a living requires two things:

1. Having enough capital to produce returns large enough to pay our expenses, plus pay for your outgoings for some period of time without having to rely on income generated from your trading;
2. Having the proven ability to make money consistently from the markets.

To the first point, think on this: consider the scenario where you need to make $5000 per month to cover all your expenses and provide for some savings. If you can consistently make 10% per month (no mean feat!), then using 5% gives you a very good safety cushion in case of an off month or whatever. In order to make your monthly expenses on a 5% rate of return you would need $100,000 in base capital. And that doesn’t account for the cushion suggested in case of a string of tough months.

As for the second point, one of the FAQ contributors has this to say:

To become a full time trader is at least a 3 year apprenticeship, and you must be prepared for some serious tests of character along the way. You will place trades and have some wins, some losses and some break evens, finding the difference between these three outcomes is what makes or breaks a wannabe trader. Some traders will discover the difference and then go on to prepare a solid foundation of rules and requirements to ultimately become a consistent winner. Others will desperately try to devise a plan and will fail, while the final and most common outcome will be to simply give up after losing too much money and being unable to determine why.

If this sounds like I’m suggesting you shelf your dreams of trading for a living, I wouldn’t go quite so far. I would, however, caution you to really think through things before making that kind of move. It’s not just about the money. It’s not just about getting out of having to work for The Man. There are other issues like quality of life to be considered. I have told people on many occasions how I’ve long known that trading full-time for a living is not for me. I trade to grow my assets and do so on a part-time basis because there are so many other things in my life I enjoy doing, and my salary suits my needs and comes with a minimum of stress (usually).

Just some food for thought. Feel free to discuss!

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

One of the lighthearted discussions that have been going on at Currensee alludes to what traders listen to when they are trading.  Some obviously prefer music, while others have financial channels on in the background.  Still some prefer having the financial channels on but fully utilizing the mute button, which is one way to avoid outside opinions from influencing your trading.

Obviously, right now many of us have the World Cup matches on in the background.  You can’t help it. How many times do you need to hear either, “We think there is value in the markets right now” or, “Gold, the US Dollar and the Yen are gaining because markets are risk averse!”

The one thing that you will notice about a World Cup striker is when they have a chance to score a goal, they will try without fear.  Meaning that when the ball leaves their foot, it is headed towards the keeper as hard and as fast as it can possibly get it there.  Sometimes the ball is shot errantly, but still, everyone knows what the objective was for the striker.

Traders learn that when an opportunity knocks, you have to be as quick to enter that trade as you possibly can.  Waiting for confirmation that your idea was correct will often times cost you valuable pips, and potentially have you caught in a squeeze play.  Sometimes traders will enter a trade and it will turn out to be a loser, yet still everyone knows what the objective was for the trader.

Those are two straightforward examples of having an objective and believing in it.  Can we say the same about the FOMC right now?  Have a look back at the FOMC statement from Wednesday:  “Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.”  Come on, blaming Greece and others for the lack of economic growth in the US? You can’t be serious.  Isn’t China’s economy bigger than Greece’s? And didn’t they just revalue the CNY because their economy is growing at a solid clip?

Unlike its peers that solely focus on inflation, the Fed’s job is to also maximize employment.  How many more jobs would have been created in the US if the markets had just left Greece alone?  I dare say that more jobs have been impacted by China of late than by Greece.  If anything, yields are lower, which should make it attractive for those that can access credit to borrow money right now.

Traders don’t go around blaming others for their losing trades.  They blame themselves, they recoup and start over.  Why is the Fed blaming “developments abroad” for their inability to restart the economy and create jobs?

Many of us still point to the Fed’s reluctance to withdrawal policy from 2004 to 2006 as the catalyst that started the current recession.  As outgoing Fed member Donald Kohn said recently “I don’t think we know enough at this point to answer with any confidence the question of whether monetary policy should include financial stability along with price stability and high employment in its objectives”.  That is the complete opposite of trading without fear, right now it sounds as if the Fed needs an objective to believe in again.

This report is for your information only and does not constitute investment or business advice or an offer to buy or sell securities.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

In South Africa they are entering the final week of the group matches.  Around the globe fans are rooting for their home teams and complaining about the officiating.  Even if you are not watching closely you can appreciate the fact that the matches are being decided on the field (or the pitch) and not in some corner office, through a popularity vote or dictated by the media.

As the World Cup begins the round of 16 matches, governmental leaders from around the globe will be meeting to discuss the global economy.  The G-20 meeting this time around takes place in Toronto before heading back to Seoul in November.

Per usual, many countries offer preliminary comments and China was the first to have their say.  They repeated what they had said earlier last week which is they are not interested in hearing complaints from the US or any other country regarding their Yuan policy. The central bank has since stated that they will allow for more flexibility in the CNY but have not offered a timeframe for the change.  It didn’t take long for Obama to form a rebuttal and state that he was looking forward to discussing how to fix the global imbalances (which means more flexibility in the CNY from an American political point of view).

Let’s journey back as to why the G-20 meetings were constructed in the first place.  In 1997 fears grew that Thailand would not be able to repay its debts and months later the Asian crisis was in full swing.  The crisis spread throughout the Pacific Rim region.  China did not contribute to the crisis, in fact in retrospect by not revaluing the CNY China was one of the reasons why the markets would eventually settle.  By 2000 it was evident that the G7/8 was too small to cope with the global economic issues and the G-20 has gained in stature ever since.

Now post the 2001/2 recession, the 2007/8 credit crisis and the 2010 European crisis our political leaders are still pressing China on their currency!  Hmmm, China’s rebuttal should be very easy to form indeed.  For one they could point to growth rates in the old G7 countries.  All of which are being downgraded by the second as discussion on the potential for double-dip recessions increase.  They could also point to inflation levels as from Japan to Germany inflation is not a threat and core levels of inflation are in negative territory in many cases right now.  They could also point to confidence levels as consumers in China are very confident right now while surveys such as the US Consumer Confidence survey or the ZEW survey in Germany point to a lack of confidence at the consumer and business level.  Of course China could also ask the G7 countries what would happen if they stopped investing in our bond markets, where would the next crisis be!

Currency traders also know not to listen to the old G7 leaders but pay more attention to the emerging leaders.  Currensee.com shows that (and I hope that I do not jinx these traders) that currency traders are profitably short USD/HKD, short NZD/JPY and half the positions in USD/MXN have been short for quite a while.

In the World Cup emerging countries have been outplaying the developed nations.  During the G-20 meetings expect the developed nations to have their say in the press but when it comes time to trade the markets listen to what the emerging countries are doing.

This report is for your information only and does not constitute investment or business advice or an offer to buy or sell securities.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

I equate retail Forex trading to growing up in today’s world. Think about it. You’re 17 or 18 years old. You grow up on the internet. The new Internet. Not the AOL, you’ve got mail, under construction, dial-up Internet. The new, open source, 2.0 social web where you can connect with friends all over the world, sharing pictures, ideas and information from any coffee shop or handheld device. Online Forex trading has the personality of a 17-year-old, but has been stuck in the grey pinstriped suit of a middle-aged guy.

I did time at all the big banks and brokers back when there was no such thing as retail Forex trading. The big guys only cared about the institutional money. That’s where all the currency bean-counting happened. It wasn’t about how many pips a trade made – it was all about hedging, managing risk and speculating. Who’s counting individual pips when you’re trading billions of dollars each day? They had sprawling trading desks staffed with phones and Bloomberg terminals and wing-tipped shoe wearing guys in suspenders. We all know how that ended up.

Fast forward to the 21st century. There was a crash. And a burn. People were looking for a new way to make a dollar. Cynical about the stock market and eager to try their hand at something new, online Forex trading came onto the scene. Retail brokers scrambled to add it on to their “other asset classes” offering and tried to make a go of it. In the background, business types all over the world started to see the opportunity to build Forex trading systems that any ordinary trader could use. As these online brokers started to crop up, so did the social web. Now, anyone could learn about Forex. Even your average Joe.

In a recent blog post on The Next Web social media blog, Ayelet Noff says:

“….Just as the advent of the internet has removed the physical barrier to Forex, social media is steadily removing the perceptual barrier, and all accompanying stigmatisms to boot. The ability to collaborate trading strategies and market predictions while tapping the overall global knowledge base, are all advantages social media is bringing to the table for online trading firms. Social media established the infrastructure necessary for a truly global online Forex community that could eventually lead to a virtual collective trading block, matching (and potentially dwarfing) the trading power and influence of those major institutions we mentioned earlier, when it comes to driving market shift.”

It’s really about the old versus the new. The old Forex market was closed, isolated and scam-infested. It was a 1-to-1 trading experience between a trader and a broker. The new Forex market is all about embracing the larger social trend to foster trust, transparency, community and knowledge-sharing between many Forex traders and many Forex businesses. Brokers, online communities, news and education websites are all here to serve the millions of Forex traders who wake up every day ready to trade.

The social dish is the Forex game-changer. Imagine the possibilities when you start as a social financial services company, rather than trying to bolt on a bunch of social features to your big old corporate infrastructure. Just try to get that approved by Compliance. The face of Forex has come a long way, baby, and feels more like “the 25 to 35 year old male with long hair, jeans, and some extra cash to burn on the side (thanks for that quote, Ayelet).” Some guys have all the fun.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

Over the last few years we have seen multiple events that have rocked the confidence of investors. A global credit crisis and a debt crisis in Europe have been the biggest headliners. Luckily for us, our governments are responding! In the UK they are getting rid of the Financial Services Authority (FSA) and replacing it with three new bodies that will report to the Bank of England. In the US we await the signing of the Financial Regulatory Reform Bill and the expected return of the Glass-Steagall Act, specifically the language that separates commercial and investment banking. Are these brave new moves that will benefit investors, or is the reshuffling just another excuse to trade the markets as volatility remains high?

In their own words, the FSA is, or was, an “independent body that regulates the financial services industry in the UK,” and has been in place since 2000. Their objective is to promote 1) market confidence, 2) public awareness, 3) financial stability, 4) consumer protection and 5) the reduction of financial crime. Hmm, how would you rate their performance? Not high, I hope.

This all seems to be lost on the FSA, though as their Chairman stated, “The overall future shape of financial regulation is now much clearer, and we are in a strong position to create a future regulatory system which builds on the FSA’s achievements over the last few years of major change.” If volatility has been high during the era of the FSA, what do you expect volatility to be when they are separated into 3 separate organizations and will unlikely communicate to each other at a high level? If I were in the UK, I’d prefer to be a trader over an investor right now.

On this side of the Atlantic, the regulatory results have not been any better. Ben Bernanke has suggested that even if Glass-Steagall had never been removed that it would not have prevented the credit crises. It looks as if the Federal Reserve will be given more responsibilities anyways. It is a bit ironic though that Bernanke, who is the leading authority on the Great Depression, is not acknowledging that Glass-Steagall could replicate the success that it had back in 1933 when it helped fix the banks and help end the Great Depression. Bernanke’s reaction seems to be just the opposite of what investors want to hear; therefore, traders once again may be salivating at the prospects of volatility ahead.

Why did all these banks get in trouble in the first place? Was it erroneous use of derivatives, excessive leverage, the chase of quarterly growth or off-balance sheet debts that had to finally be paid? Whether it’s the lack of knowledge or a lack of will, our governments don’t seem to have an answer. Thus we bring back old regulations in the US, and diversify the failure of the FSA in the UK. Does this want to make you be an investor or a trader? I’ll take trading, thank you very much. Currency trading offers better liquidity, better transparency and has less failed regulatory bodies watching over it than equity trading.

This report is for your information only and does not constitute investment or business advice or an offer to buy or sell securities.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

Here’s a scenario I’ve been thinking about the last week or so:

First, take a look at the monthly USD Index chart below. Notice how the market stalled out below the early 2009 peak. Notice also how wide the Bollinger Bands are. This could be the set up for the market to turn down at least into the middle part of the recent broad range.

Now look at the S&P 500 chart. Here too we’ve seen a recent upside failure. One could point to resistance near 1200 from a low put in during the big decent as well as another from back in 2006 during the rally. The Bollingers are flat to narrowing. If the index cannot hold above about 1040, the odds will be very good for some kind of move back toward 900, or lower.

Then there’s the 10 year Treasury Note yield chart. Here too we’re looking at a recent rejection of higher levels and the risk of a breakdown, if it hasn’t already begun. It’s not hard to imagine the rate dropping below 3% once more in the months to come.

Now the question that comes to my mind is what would be negative for the dollar, negative for stocks, and negative for US interest rates? Those three markets have not moved in tandem of late. It’s generally been stocks going one way and the USD Index and Treasury yields going the other thanks to the risk-on/risk-off nature of the market psychology. If yields are falling, it suggests economic weakness and/or expectations of holding or lower rates by the Fed. If stocks are falling it’s generally about weakness in the economy and/or corporate profits.

So what would cause the dollar to drop at the same time as stocks and Treasury rates?

The number one reason that jumps out at me is a shift away from the flight-to-quality mentality which has bid-up the dollar and a return to more normal trading. That is the type of trading which sees the dollar lower on declining Treasury rates. In other words, the risk I’m seeing in the potential price action is an economic downturn in the US.

For this scenario to develop, however, the dollar needs to continue its retracement off recent highs and stocks and yields both need to carry through with their potential bearish set-ups. It might be a while yet before we see confirmation, if it’s to come, and if any other market goes higher rather than lower it changes things all together.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

It is no secret that the vast majority of mutual funds underperform their benchmarks. This is one reason why hedge funds grew like weeds over the last decade as many managers wanted to showcase their talents at going both long and short. Despite a volatile decade, many hedge funds have found stock picking to be harder than they first thought. Sadly, the ones that are hurt the most by this are investors.

Right now index funds have become a popular alternative, as a passively managed product should at least equal the benchmark. Still, we live in an era where the Dow Jones seems to always be hovering 10,000, the Nikkei cannot hold onto an upward trend and the European equity indices seem to be caught in the middle. Researchers at Dimensional Fund Advisors have released a study that shows the top performing 25% of stocks are responsible for all the gains in the stock market from 1980 to 2008. That means that 75% of stocks lose money. Since industry regulations mandate that a mutual fund has to be highly diversified, it is no wonder that mutual funds underperform. Have I mentioned that these funds charge fees to manage your money as well?

For those that have an interest in seeing their investments grow it is time to look outside the traditional investment box.

How about investing in currencies? The universe of currencies is small compared to that of equities. The chance that the euro, pound, yen or the US dollar goes to zero is small – very small. Just look at the woes in Europe – and realize that the euro is still worth more than the US dollar – and you get the picture. Transparency, liquidity and other important factors are all extremely high. Fees should be relatively small (swap points and other factors, which will depend on your broker) and you are your own manager.

Hesitant? Then take a look at your mutual fund holdings and tell me be about each company that you own. Not sure where that holdings list is? You shouldn’t be afraid of doing a little homework and investing in foreign exchange.

In terms of looking for information and strategic ideas, you should start at Currensee. Here there are investors and traders who show their trades, strategies and returns. Build a team and share ideas. Take a look at the ‘Strategy’ section, where you can see profitable and not-so-profitable trading ideas. In the ‘Community’ section, you can filter through these strategies to help you find one that matches your style.

Will the problems in the Euro Zone continue and help the US dollar gain versus the euro or has the euro hit bottom? Both the Australian and Canadian dollars are near parity to the US dollar, but can this continue? The yen has made sizable gains against most all currencies over the past few years, yet it has major fiscal problems. To say that there will be sizable moves ahead in the currency markets is an understatement.

You could always place more money in a mutual fund, most of which underperform, or you could manage your own money, learn the world of foreign exchange and look for returns in the world’s largest market.

This report is for your information only and does not constitute investment or business advice or an offer to buy or sell securities.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.