How Wall Street Hiring Affects Forex Investment

On July 16, 2010, In Trading

Wall Street is hiring again according to a recent New York Times article.  They didn’t lose that many jobs anyways compared to other sectors and considering that they caused the economic recession.  In any case, they are hiring again.

The financial sector, although clearly not perfect, have always been the best predictors of economic recovery.  So the fact that they are hiring now is an indication that they believe the worst is behind us and we have sunny days ahead.  So what does that mean for the forex market?

Let’s first look at what happened to the currency market when the market first crashed in 2008.  First of all, the currencies in emerging markets all tanked.  As the environment was getting fearful, they were pulling their money out of risky assets causing the currencies of emerging markets to fall dramatically.

The ‘safe’ currencies like the US Dollar, Euro and currencies of other developed countries came into vogue.  In addition, precious metals like gold and silver started to skyrocket.  Although gold and silver are not currencies themselves, they have historically always been tied to it for a number of reasons.

For those who are looking at a long term forex investment in specific currencies, they should start eyeing the emerging markets again.  The financial sector is giving us an indication of what they think is going to happen.  If they are correct, emerging markets will be one of the first places to see and upturn, causing their currencies to rise.

The other kinds of currencies you want to look at are from commodity rich countries.  As the economy recovers and people start getting jobs, demand for consumer goods will rise.  When that happens, they will need raw materials to manufacture those consumer goods.  That means currencies of countries like Canada, which is heavily dependent on commodities will rise.

These are just some of the ways you can profit from the coming economic upturn as predicted by the current Wall Street hiring that has been happening.  There are many other forex trading currency strategies that you can leverage on this news.  Even with the ones I mentioned, you can go several different ways with it as well.

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Foreign Currency Market Regulations

On June 4, 2010, In Trading

Forex regulations refer to stipulations that control the functioning of the forex currency markets. They are designed to build a solid footing for investors and brokers to trade while protecting honest traders from unethical salespeople who dupe the uninitiated. The group of currency trading overseers monitors the licensing process of brokers who are authorized to do business and penalizes those who flout the regulations.

Three markers identify a licensed broker within the foreign currency markets. One, the broker must have a license. Two, the website must display a demonstration, or trial account. Three, personnel to answer questions about company affairs must be reachable by phone and be helpful.

In America two groups created and monitor forex regulations. Membership in the National Futures Association or NFA is required for any broker who works from the USA. It is a self-censuring group of industry insiders who attempt to keep the market secure for the public. Then, in 1974, the federal legislature formed the Commodity Futures Trading Committee, or CFTC. This body makes the ordinances that govern forex trading and has the authority with which to enforce them. The CFTC body is empowered to enforce its rules both by levying fines and by forbidding violators from operating within the country. Properly certified forex brokers who do business according to CFTC stipulations give security to both the trader and people looking to make forex investments, by adhering to the guidelines which keep the market healthy.

Deceitful people looking to make money off naive investors, on the other hand, are after quick and easy profits. They are searching for easily duped and non-Internet savvy people. They will not usually invest either the time or money in a network of telephone operatives, and will not usually be available to answer any difficult queries regarding forex guidelines, the market, or their company. The savvy trader will phone the company they are interested in  investing with and not be satisfied until the tough questions have been answered by real people manning the other line.

Over one billion dollars of trading goes on daily in the forex market. It is supremely dynamic and volatile. Laws and guidelines guard both investors and honest brokers against the connivers who try to trick the more gullible out of their investment dollars.

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