Forex Blog: Currency Trading News & Analysis.

July 18th 2008

Forex is Risky

Without exception, every time there is a period of sustained volatility in forex markets, a flood of new forex accounts are opened as new traders try to capitalize on the action.  Also, without fail, a concerned journalist inevitably takes it upon himself to warn these would-be profiteers that trading forex is risky, as if that were not abundantly obvious. This past week is a perfect example, as the Dollar touched a record low against the Euro on the basis of credit concerns. One columnist pointed out the significant upside potential of purchasing a CD denominated in foreign currency, but also implored investors to hedge their exposure and limit leverage. His advice: diversify by buying multiple currencies and/or equities for foreign companies and/or exchange traded funds based on hard-to-mimic strategies. Marketwatch reports:

[He] recommends…hedging your bets in you think the dollar will continue to weaken…[through] specialized mutual funds or exchange-traded funds that move inversely to the dollar. He holds the Pro Funds Falling U.S. Dollar Fund

Read More: Foreign currency trading is as risky as it gets

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Posted by Adam Kritzer | in Investing & Trading, US Dollar | No Comments »

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© 2004 - 2018 Forex Blog.org. Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.