Trading Profitably on the Foreign Exchange Market

You may be asking yourself "how does one begin to trade profitably as a currency trader?".

First, it is important to closely monitor foreign equity markets to attempt to predict or model how their respective currencies will perform against other currencies, ideally, currencies that are not very closely related, nor proportional, to the former currency.

For example, Mexico's economy is closely linked the the U.S. economy, in some respects, but in other respects, they are not very directly proportional since Mexico's economy is currently improving as a consequence of increased consumer financing, an increased number of remittances from family members in the U.S., and other factors.

Back to our original point, when you begin to notice that an equity market is about to become bullish, it may be a signal that the currency of the country in which the equity market you're looking at is based may be about to rise. Conversely, if the market turns bearish, that may be a bad sign for the country's respective currency. Nevertheless, you may still be able to capitalize on bear markets and economies by short-selling a currency pair. That is one distinguishing feature in currency trading: you may bet against a country's economy (including your own!) by betting against that country's respective currency.

Other currency fundamentals to consider include a country's interest rates, deficit, exports and imports, as well as, and probably very importantly, oil prices. Look at how the recent OPEC meeting affected oil prices and how that in turn had a considerable effect on the DJIA.

Joshua M. Kunken is Currency Analyst for ForeignMarketWatch.com.His articles have been featured at ForexTrack.com.

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Iceland#39;s Krona Currency Trading Halts as Kaupthing Taken Over - Bloomberg

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://news.google.com/news/url?sa=Tct=us/0i-0fd=Rurl=http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3178567/Icelandic-bank-chief-blames-British-savers-for-collapse-of-Kaupthing.htmlcid=1255748512ei=hZHxSPePKZjI9ASo1azBBwusg=AFQjCNFDYuLpapHqgdYXbSC-LnSMEzZm3wimg src=http://news.google.com/news?imgefp=T5QlsLWj-0gJimgurl=www.telegraph.co.uk/telegraph/multimedia/archive/01007/kaupthing_1007021c.jpg width=80 height=50 alt= border=1brfont size=-2Telegraph.co.uk/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/0-0fd=Rurl=http://www.bloomberg.com/apps/news%3Fpid%3D20601085%26sid%3Daiz5QIq94nrw%26refer%3Deuropecid=1255748512ei=hZHxSPePKZjI9ASo1azBBwusg=AFQjCNGpzvDtFX8ilZ736i3-R7nW34sC_AIceland#39;s Krona bCurrency Trading/b Halts as Kaupthing Taken Over/abrfont size=-1font color=#6f6f6fBloombergnbsp;-/font nobrOct 9, 2008/nobr/fontbrfont size=-1By Bo Nielsen Oct. 9 (Bloomberg) -- Trading in the Icelandic krona came to a halt after the government seized control of Kaupthing Bank hf, the nation#39;s b.../b/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/0-1fd=Rurl=http://blogs.wsj.com/marketbeat/2008/10/08/shortest-currency-peg-ever/cid=1255748512ei=hZHxSPePKZjI9ASo1azBBwusg=AFQjCNEjAtCbQhHum7eRZ7G1uHtsSvkn6QShortest. Currency Peg. Ever./a font size=-1 color=#6f6f6fnobrWall Street Journal Blogs/nobr/font/fontbrfont size=-1a href=http://news.google.com/news/url?sa=Tct=us/0-2fd=Rurl=http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/3131573/Financial-Crisis-hit-Iceland-draws-up-banking-rescue-plan.htmlcid=1255748512ei=hZHxSPePKZjI9ASo1azBBwusg=AFQjCNFcxxDjW8umjri97KeuMlRTaqrFNAFinancial Crisis-hit Iceland draws up banking rescue plan/a font size=-1 color=#6f6f6fnobrTelegraph.co.uk/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1255748512hl=ennobrall 1,674 news articles/nobr/a/font/div/font/td/tr/table

Stampede for Yen Saps Asian Currency Trading - Wall Street Journal

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/1-0fd=Rurl=http://online.wsj.com/article/SB122358053217020031.html%3Fmod%3Dgooglenews_wsjcid=1256461620ei=hZHxSPePKZjI9ASo1azBBwusg=AFQjCNFZaaUh-szafbf5rMFnRMmtWJQaqgStampede for Yen Saps Asian bCurrency Trading/b/abrfont size=-1font color=#6f6f6fWall Street Journalnbsp;-/font nobrOct 9, 2008/nobr/fontbrfont size=-1Meanwhile, hedging against foreign-exchange risk has become more difficult as options related to bcurrency trading/b have become more expensive, Mr. Liu said. b.../b/font/div/font/td/tr/table

MCX Stock Exchange begins currency trading - Sify

RBI, Sebi to relax currency trading norms - Hindu

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China Banks Cut Currency Trading With Foreign Lenders (Update1) - Bloomberg

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/4-0fd=Rurl=http://www.bloomberg.com/apps/news%3Fpid%3D20601080%26sid%3DalJJx6wybqMc%26refer%3Dasiacid=1250859859ei=hZHxSPePKZjI9ASo1azBBwusg=AFQjCNEGJ63-8OwET2aQRaN2kyZ6uHpVUgChina Banks Cut bCurrency Trading/b With Foreign Lenders (Update1)/abrfont size=-1font color=#6f6f6fBloombergnbsp;-/font nobrSep 26, 2008/nobr/fontbrfont size=-1By Judy Chen and Belinda Cao Sept. 26 (Bloomberg) -- China#39;s banks are limiting foreign- exchange transactions with US and European financial companies on b.../b/font/div/font/td/tr/table

MICEX plans to open trading as normal on Mon. - RIA Novosti

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/5-0fd=Rurl=http://en.rian.ru/business/20081010/117667286.htmlcid=1255026447ei=hZHxSPePKZjI9ASo1azBBwusg=AFQjCNG8IzXFWqKVU5-n2YO0KshodtfMAwMICEX plans to open trading as normal on Mon./abrfont size=-1font color=#6f6f6fRIA Novosti,nbsp;Russianbsp;-/font nobrOct 10, 2008/nobr/fontbrfont size=-1MOSCOW, October 10 (RIA Novosti) - The Moscow Interbank Currency Exchange plans to begin trading as normal on Monday morning unless the Federal Service for b.../b/font/div/font/td/tr/table

Japanese Yen Likely to Gain as Currency Trading Crowds Buy USDJPY - Daily FX

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Slow take-off for Zimbabwe’s foreign currency trading scheme - The Zimbabwean

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/7-0fd=Rurl=http://www.thezimbabwean.co.uk/index.php%3Foption%3Dcom_content%26view%3Darticle%26id%3D15567:slow-take-off-for-zimbabwes-foreign-currency-trading-scheme-%26catid%3D31:top%2520zimbabwe%2520stories%26Itemid%3D66cid=0ei=hZHxSPePKZjI9ASo1azBBwusg=AFQjCNG0Kima0gCFGGSDdWrFCFIiHQMTnASlow take-off for Zimbabwe’s foreign bcurrency trading/b scheme/abrfont size=-1font color=#6f6f6fThe Zimbabwean,nbsp;Africanbsp;-/font nobrOct 2, 2008/nobr/fontbrfont size=-1After a slow take-off for the new foreign bcurrency-trading/b scheme, a handful of shops started selling in US dollars or South African rands. b.../b/font/div/font/td/tr/table

Forex Market Volatility Remains Elevated, Breakout Currency ... - Daily FX

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/8-0fd=Rurl=http://www.dailyfx.com/story/special_report/special_reports/Forex_Market_Volatility_Remains_Elevated__1222701007342.htmlcid=0ei=hZHxSPePKZjI9ASo1azBBwusg=AFQjCNElKosHb1ciYdvwebmyKnRr6Te73wForex Market Volatility Remains Elevated, Breakout bCurrency/b b.../b/abrfont size=-1font color=#6f6f6fDaily FX,nbsp;NYnbsp;-/font nobrSep 29, 2008/nobr/fontbrfont size=-1Forex market conditions continue primed for breakouts, as pronounced market indecision surrounding the US Treasury’s bailout for credit markets leads to b.../b/font/div/font/td/tr/table

Markets Crashing… Currency Trading the Way to Go? - PoliticalLore.com

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://news.google.com/news/url?sa=Tct=us/9-0fd=Rurl=http://www.politicallore.com/writers/alexander-nobles/markets-crashing-currency-trading-the-way-to-go/383cid=0ei=hZHxSPePKZjI9ASo1azBBwusg=AFQjCNHaDR4diYrI6JaiXcq_BDWUFQ7eHwMarkets Crashing… bCurrency Trading/b the Way to Go?/abrfont size=-1font color=#6f6f6fPoliticalLore.com,nbsp;Hampton Fallsnbsp;-/font nobrSep 17, 2008/nobr/fontbrfont size=-1I have very recently tried bcurrency trading/b. bCurrency trading/b does need tender loving care but, it does seem like it’s an easy way to pull in a gain. b.../b/font/div/font/td/tr/table

Currency-Trading - Google News

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