« While others bury their reputation, I hedge. »

If you are a Forex trader, a true professional, someone that backs up every decision in the currencies market with a method, structure, pragmatical approach, and stoicism, you know that the Forex market is the ultimate cemetery of reputations. Sometimes I think that it was created just to make meteorologists feel less embarrassed about their weather forecasting capabilities.

As a trader, have you ever experienced that awkward situation where people ask you “where the [insert currency here] will go”? It happens all the time, at every party, every meetup. It probably happened during your Thanksgiving dinner.

If you live outside the US, for example, in Asia or Latin/Central America chances are your currency is not part of a major pair. In such places, people are even more inclined to ask you where [insert currency here] will go.

Fortunately, we don’t know. Too bad the conversation ends and people don’t want to hear about what you can do with currencies besides going to Disneyland.

Whether you believe in the future of the US Dollar, it’s up to you as a trader/investor. The USA is still growing and its currency is still strong, which makes it a natural hedge against weak and exotic currencies. As a bonus, they still pay a positive interest rate.

Call me a paranoid but coming from a country that once had some 30,377% annual inflation rate, and killed its own currency 5 times in less than 10 years, yes, a safe haven for me is a strong currency. While others bury their reputation in the Forex market, I hedge.

Speaking of hedging against currency devaluation, this month’s Trading Justice Newsletter is out: “The Omelet & the Eggs”, a true investment story that happened via Whatsapp. A friend of mine wants the omelet but is afraid of breaking the eggs. Meanwhile, the eggs deteriorate in the refrigerator. Access it here.

Chart of the Day

EUR/USD

In “The Omelet & The Eggs” story, my friend thinks that parking her money in a checking account is ok and “at least” she is not losing anything.

She is losing a lot. If she only had bought a handful of Dollars and kept them as a portfolio hedge, things would be very different. However, it is easier to talk about her Disneyland vacation.

Video of the day

What is Inflation

Inflation is the sustained increase in the prices of goods and services over time. It is a quantitative measure generally expressed as a percentage. Inflation indicates a decrease in the purchasing power of each unit of a nation’s currency.

Today’s line up

Traders Lounge 11 PM EST

Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.

Halftime Report 12:30 PM EST

The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.

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