FX (or Forex or Foreign Exchange or Currency) is a derived asset class, which means it is affected by every other group of assets, which could be equities, fixed income, commodities, and what not
While these correlations make it so much harder to trade the currencies (as any dabbler in currency trading would agree), it also becomes so much more interesting to trade
With the umpteen number of possible correlations between the currencies, and between each currency and the related assets, not to mention, breakdown in long observed correlations, each day is truly different and exciting
This implies the possibility of generating numerous trade ideas, and if backed by sound logic and reasoning, alpha can be generated
Also, currencies trade almost round the clock, and barring a few exceptions (the number of which is dwindling by the day) liquidity is almost never a concern
I have spent almost a decade observing currency movements and charts and it is nothing short of exhilarating, especially if you have got money on the line!
While these correlations make it so much harder to trade the currencies (as any dabbler in currency trading would agree), it also becomes so much more interesting to trade
With the umpteen number of possible correlations between the currencies, and between each currency and the related assets, not to mention, breakdown in long observed correlations, each day is truly different and exciting
This implies the possibility of generating numerous trade ideas, and if backed by sound logic and reasoning, alpha can be generated
Also, currencies trade almost round the clock, and barring a few exceptions (the number of which is dwindling by the day) liquidity is almost never a concern
I have spent almost a decade observing currency movements and charts and it is nothing short of exhilarating, especially if you have got money on the line!
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