Hi! We're Boris Schlossberg and Kathy Lien, and we've been making people money in Forex for over a decade. As Directors of Currency Research at GFT
and long-time Investopedia.com contributors, we've seen our share of wins and losses... Thankfully, over the years, we've also been able to learn from our less glamorous predictions and come up with a currency trading system that has earned us a very respectable success rate on Forex trades.
Today, we're sharing our Forex trading system with you. We're going to show you how to analyze the movements of any currency pair using a simple checklist of five key currency-moving factors. These are the same factors that we use to analyze our own Forex picks.
Although trading currencies originated as a way to purchase foreign goods and services, investors soon learned that there are huge speculative returns to be made by predicting the value of international currencies. Today, those who use the Forex market as an investment vehicle outnumber those who trade currencies to expedite world trade. In fact, as of December 2006, 80% of all trades in the currency market are made by investors or investment entities out to make a quick return on their extra cash.
The Forex market is the most prolific market in the world, attracting trillions of dollars per day from central banks, corporations, hedge funds, and individual speculators. This fast-paced market operates 24/7, 5 days a week, beginning with trade in Wellington, New Zealand, and continuing on to Sydney, Australia; Tokyo, Japan; London, England; and New York, New York before the whole cycle begins again.
Forex is exciting, and with the right guidance and a bit of luck you can earn 500%, 600%, even 2000% returns. But Forex is not for everyone. If you prefer the penny slots to the high roller tables, then the high-stakes world of Forex trading is probably not for you. Forex is best traded with money you have allocated as risk capital -- money you don't need for day to day expenses.
So, if you'd like to spice up your more secure investments with a pinch of adrenalin and a dash of risk, try a few Forex trades. But first, let us show you how you can gain an edge in the market with the...
Five Keys to Predicting Forex Market Movements
To profit from the fascinating world of international trade, you must have a firm grip on the key factors that affect a currency's value. When making our trades, we analyze five key factors. In order of importance, they are:
- Interest Rates
- Economic Growth
- Trade and Capital Flows
- Merger and Acquisition Activity
If you can predict how each of these factors affect your currency trades, you have the foundation to make serious returns.
Next > Learn How to Profit from Interest Rate Differentials