Forex Focus  |  NOV 2005

Forex Focus by Kathy Lien

Stocks & Commodities V. 23:11 (32): Forex Focus by Kathy Lien Access to foreign exchange trading has opened up exciting trading options for the retail trader. You can now trade alongside corporations and institutions in a highly liquid market that is global, traded around the clock, and highly leveraged. Before jumping into this market, however, we must understand the factors that affect the forex market. With that in mind, STOCKS & COMMODITIES has introduced Forex Focus to better prepare the retail trader to participate in the currency market. Ever thought of currencies as an alternative or supplement for oil? Maybe now you will. Oil prices have been skyrocketing over the past year, with prices of light crude increasing 60% since January. Some traders think oil prices will continue to rally to $80 or even $100 a barrel, while others think that it is meeting resistance and, as a result, could turn lower from here on. Typically, traditional oil traders prefer to trade oil futures directly to express their views of where oil may be headed next, but many traders have been turning to the foreign exchange market as a supplemental or even alternative way to express those views. If you think oil prices are headed higher, the primary advantage of trading currencies instead of oil futures is the ability to earn interest. Not only could you capitalize on oil appreciation but you could also earn interest income.

by Kathy Lien