Maria’s Note: Maria Bonaventura here, senior managing editor of Inside Wall Street with Nomi Prins.
Today, we’re handing the reins to master trader and Nomi’s colleague – Larry Benedict.
In the past year, we’ve seen banks collapse, bond prices drop, and stocks whipsaw.
And according to Larry: “Brace yourself – it’s about to get even crazier.”
But instead of running to cash… or speculating in stocks… Larry’s advising a completely different approach.
He’s recommending people start trading the currency markets.
This unique market provides a hedge against broader volatility. And Larry’s traded more than $500 billion worth of currencies since the ‘80s.
That’s why he’s holding a special briefing this Wednesday, April 19 at 8 p.m. ET. During it, he’ll explain how you can profit from forex trading… and the exciting things happening in this space.
Reserve your spot with one click here. Then, read on for more details…
It was 3 a.m. when the phone rang.
My broker had woken me up because the Japanese yen just reached the price level that I’d told him to notify me at.
Groggily, I gave him a new higher price and told him to call me if it reached that.
Just fifteen minutes later, the phone rang again.
This was a common occurrence when I first began trading currencies back in the ’80s.
Back then, headlines declared that America had lost its financial and technological edge… and that Japan was on the cusp of world supremacy.
Some speculated that the yen would soon be the new world reserve currency – much the same way people fear about the Chinese yuan today.
Lawmakers complained of unfair trade deals, stolen intellectual property, and other threats due to this Japanese dominance.
Yet the collapse was already underway. New tariffs effectively blocked Japanese imports from the U.S. market.
And Japan’s central bank attempted to keep the value of the yen low, which caused a stock bubble. When that burst, it sent the country into a “lost decade” recession.
Due to all this action, we saw crazy price movement and volatility throughout the ’80s and ’90s. That made this a fascinating space to work in – to the extent that, over my 35-year career, I ended up trading more than $500 billion worth of currencies.
But that was the ’80s and ’90s. More recently (in the past decade or so), central banks around the world have kept tight control over their country’s currencies.
That prevented many of the wild swings and big trading opportunities that we saw in the past.
But lately, things are feeling more like they did when I first started trading currencies.
And that means this market should be on your radar…
A Reliable, Lucrative Strategy
Many people are unfamiliar with the foreign exchange market… more often abbreviated as “forex” or “FX.”
But in fact, this is the largest market in the world. The forex market averaged around $7.5 trillion worth of trades per day in 2022.
And there’s one big reason I’ve traded so much currency over my career. FX is one of the most reliable and lucrative trading strategies out there.
This is the BarclayHedge Currency Traders Index since its inception…
That’s one of the smoothest, most consistent hedge fund strategies I have seen.
And if you look at stress points, this strategy did well. In the chart above, you can see how forex weathered the Asian currency collapse in the late ’90s, Soros vs. the Bank of England, the tech bubble collapse of 2000, and even Covid.
Given that the recent volatility shows no signs of waning, that’s a valuable trait.
Even better, forex returns come from a completely different opportunity set compared to the stock market.
Since 1990, this FX hedge fund index had a -0.08 correlation to the S&P 500, with a better risk-return profile.
That means forex trading is a great way to add some diversity to your portfolio. It can work even when other things aren’t.
And as I mentioned above, there are several reasons this market is more interesting now than it has been in over a decade…
To start, the value of the euro relative to the U.S. dollar in our pocket hit a 20-year low last year. We haven’t seen this kind of parity since around 2002. That’s giving us some interesting dynamics to work with.
Beyond that, inflation and interest rates have been soaring. That’s led to abrupt changes in monetary policy on a global scale.
Currencies are particularly sensitive to macro events like this. And ultimately, when interest rate narratives take hold of the market, FX becomes the place to be.
How to Get Started
The good news is, to trade forex nowadays, you no longer have to be woken up in the wee hours of the morning by your broker.
Many online platforms now exist to help anyone get started in this space.
But forex trading isn’t quite like trading from your stock brokerage. There are some significant differences.
For one, forex trades 24 hours a day, from Sunday at 5 p.m. ET through Friday at 5 p.m.
And many people use leverage to amplify their returns. That’s a powerful tool that requires very careful management to ensure it works for you and not against you.
So I want to lend my experience to anyone interested in learning about forex.
That’s why I’m preparing a special session to educate traders on how to get started. It will go live on April 19 at 8 p.m. ET.
There, I’ll explain more about why we’ve seen interest in forex growing… and some of the exciting things I see happening in this space.
I want to guide you through this opportunity, so please plan to tune in.
Editor, Trading With Larry Benedict