INTERVIEW
The Ins And Outs Of Currency Trading
Kathy Lien is managing director of FX Strategy for BK Asset Management and cofounder of BKForex.com. Lien has more than 13 years of experience in the financial markets with a specific focus on G20 currencies. Her career started at JPMorgan Chase, where she worked on the interbank FX trading desk making markets in foreign exchange and later in the cross-markets proprietary trading group where she traded FX spot, options, interest rate derivatives, bonds, equities, and futures. In 2003, she joined FXCM and started DailyFX.com, a leading online foreign exchange research portal. In 2008, Lien joined Global Futures & Forex as director of currency research, where she provided research and analysis to clients and managed a global foreign exchange analysis team.
As an expert on G20 currencies, Lien is often quoted in The Wall Street Journal, Reuters, Bloomberg, and other leading news publications. She also appears regularly on CNBC and on Sky Business. Her extensive experience in developing trading strategies using cross-markets analysis and her edge in predicting economic surprises serve as key components of BK’s analytical techniques.
Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce Faber interviewed Kathy Lien on July 12, 2012.
Kathy, can you tell us about your background and how you got interested in forex?
My first job out of college was in forex. It is as simple as that. After I graduated from New York University’s Stern School of Business, I joined JP Morgan’s sales and trading program. I ended up in the interbank forex trading desk, where I learned how to make markets in foreign exchange. That was where I got my first insiders’ view of how the market works. I learned what moved currencies. I learned how customer orders were handled, and how positions were managed. Basically, I learned how the pros do it from the inside out.
I trade the EUR/USD a lot, but it is not the only one that I trade. I trade almost all the major currency pairs.After JP Morgan merged with Chase, I moved over to the cross-markets proprietary trading group. That was when I had the opportunity to expand my skills from just forex spot over to options, interest rate derivatives, bonds, equities, and futures. I did that for a couple of years. That was where I got my intermarket knowledge, and I got a good sense of how the different instruments enhanced each other’s price action, and different ways to express my trade ideas. I did that for a couple of years.
Were you always a trader, or did you feel more comfortable as an analyst?
I started as a trader and only became an analyst later on, which is why I always call myself a trader first and an analyst second. On a day-to-day basis, I am much more of a trader than an analyst because at the end of the day, it’s not so much what is important theoretically, but how I can express the trade.
In 2003 I joined FXCM and helped them start DailyFX.com, which is one of the leading FX markets informational portals. Then in 2008, I joined Global Futures and Forex (GFT) as the director of currency research. Then in June 2012 my business partner, Boris Schlossberg, and I left GFT to expand our own business. Since 2007, we’ve been providing trading signals and some general education to individual investors and traders.