OPENING POSITION
December 2003
The recent slide in the US dollar and a rise in the value of the other major currencies such as the euro, the British pound, the aussie, and the loonie, have shifted attention to the currency markets of late. With the currency markets showing an increase in volatility, it's only natural for traders to be tempted to absorb the profits from foreign exchange. In this 24-hour market, where roughly $1.2 trillion are traded on average per day, where does the individual trader stand? While it is relatively easy for institutions to include currencies as part of their array of products, participation for the individual trader is more difficult. Fortunately, in the last year or so, opportunities for the retail trader to participate in the currency markets have been opening up rapidly.
Although it may appear to be different from trading equities, bonds, or commodities, the basic principles of trading currencies using technical analysis are like trading anything else. For example, our feature article "Trading In The Forex Trenches" by Matt Blackman, which starts on page 14, takes a look at the methods and strategies that currency trader Michael Kouznetsoff employs. You'll find that his collection of technical tools and indicators is not that different from those that you might apply to trading any other asset class. In fact, the technical trader may even have an advantage when trading currencies because, according to Commodex System publisher Philip Gotthelf, whom we interviewed this month, currencies trend much more prominently than equities do. In fact, if you explore the forex market, it's quite likely you'll hear this statement often. Read more about the behavior of the currency markets to get better insight and to prepare yourself to trade this market. The interview starts on page 72.
Just as with any kind of trading, it is important to understand the market before placing your trade. One important aspect of trading currencies is that you are participating in a global, 24-hour market, which means you must be aware to some extent of what is going on around the world politically, economically, and socially. Fortunately, with the advancement of the Internet, the necessary resources are available at your fingertips.
Speaking of resources, every year STOCKS & COMMODITIES subscribers have the opportunity to tell us which ones are worthy of merit. Please visit our website, www.Traders.com, to cast your votes on our online ballot for the products and services you think most deserve our Readers' Choice Awards. Winners will be announced in our Bonus Issue, to be published in February 2004. Make your opinions count!
Jayanthi Gopalakrishnan,
Editor
Originally published in the December 2003 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2003, Technical Analysis, Inc.
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