Big Profits In Currency Markets

| May 2, 2008 | 0 Comments

Do you know what the largest market in the world is?  It’s the trading of global currencies.  More than 2 trillion dollars is traded every day.  Let me put it in perspective for you.  That’s more than all of the stock exchanges in the world . . . combined.

Understandably, the currency market is the most competitive in the world.
You can literally trade currencies 24 hours a day 6 days a week.  The market follows the sun around the globe.  When the Tokyo market starts to close, London markets open.  New York markets take over when London shuts down.  Then as New York trading ends, Tokyo starts up again.

The markets trade all day every day.  You can find currency trading not only in the major markets like London, Tokyo, and New York, but in smaller markets all over the world.

The most exciting part of currency trading is the profit potential. Fortunes can be won and lost in a matter of moments.  Currency trading has been around for ages and some of the stories are the stuff of legends.

In my mind, the best stories are always true.

My favorite currency trade comes from ancient history.  In June 1815 the Duke of Wellington was battling Napoleon and the French army at Waterloo.  The famous banker Nathan Rothschild had agents closely monitoring the battle.  With the mighty French army headed for defeat, they rushed a secret communiqué to London.

Legend has it that Rothschild first started selling the British Pound.  This created quite a stir.  Other traders noticed the famous banker selling. Thinking he knew something they didn’t, they quickly started selling in a frenzy.  The British Pound reached new lows.  Suddenly, Rothschild’s agents started buying at the very bottom.

He took a huge position in the British Pound.  When news of the British victory at Waterloo reached London later that day the Rothschild fortune was cemented.

Currency trading these days can be just as exciting.

At one time these markets were only open to professional investors.  You needed millions of dollars just to participate.  Those days are behind us now.  Investors with as little as a few hundred dollars can capitalize on some of the global trends in the market place.

The introduction of currency ETFs have made trading easy.  No longer do you need to worry about the futures markets, leverage, margin calls, or trading pairs.  It’s very straightforward for any investor to take a position in a particular currency.

But it gets better.

Every day, new currency ETFs are being introduced.  Just yesterday I received information from WisdomTree Investments.  They’ll be launching five new currency ETFs later this month.  Of the five ETFs, three are new, providing easy access to currencies like the Indian Rupee, Chinese Yuan, and the Brazilian Real.

The official names of these products are: WisdomTree Dreyfus Chinese Yuan Fund (CBY), WisdomTree Dreyfus Indian Rupee Fund (ICN), and WisdomTree Dreyfus Brazilian Real Fund (BZF).

As you know, I’m always looking for easy ways to profit in the market. The currency markets are influenced by global economics.  By identifying trends in global economies, savvy investors can profit from the eventual appreciation (or depreciation) of the currency.

For more aggressive traders, options on currencies can be a great way to take advantage of these trends.  You get the enormous profit potential of futures currency trading without the unlimited risk.

In our new trading service, Currency Options Insider, we’ve been using options to profit from the temporary strength in the US Dollar.  The Fed’s latest moves are creating some unique opportunities in the world’s currency markets.

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Category: Currency Trading

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The Dynamic Wealth Report works with a number of staff writers and guest experts who specialize in everything from penny stocks to ETFs to options trading. These guest analysts post under the 'staff writer' moniker for ease of use.

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