Sorry for the lack of posts lately. Personal projects, family matters, friends, stuff…
I’ve had a few interesting discussions with my friends who many of them work in the financial industry. Many of them have commented that there has been tons of money being pulled out from the portfolios and placed into low income but more stable GIC and long term savings. Not to mention alot of them fear for their own job security as well.
We also talked about the reason why the money is not flowing into the money market due to the complexity and risks involved in the forex trading market. The recent spreads have been swinging wildly during the major news events such as Bushes’ proposed and eventual failed $700 billion plan to save the banks. One of my friends also noted that he has gotten a few inquiries about currency hedging.
I can totally understand why people are afraid to tap into the forex market as compared to stock trading, currency trading requires 100 times more due diligence and understanding of how the currency market works. It’s also no help that currency trading has always had a bad rep due to a combination of the typical ignorance about the market and real fraud cases.
Having said that, I could still see an increase in interest of the forex market when people realize that long term saving vehicles and other GIC types are not going to get their money anywhere. There should be more business for the individual money managers who manager small clients’ portfolio in the forex market.
I think that the stock market traders may rather go to futures markets to trade stock market futures.
The global financial market has been on all-time lows than highs. Yes, one can use a Hedging Position in Forex Trading that occurs when a position is “hedged” at a time when another position is opened in the opposite direction of an already-open position. With no major losses to the Forex trader, hedging is quite safe.