Chris’ note: Regular readers will know all about our resident Market Wizard, Larry Benedict.

He was featured in the classic book on the greatest hedge fund traders of all time, Hedge Fund Market Wizards, because of a 20-year winning streak from 1990 to 2010.

Since the bear market began last year, he’s given his readers the chance to close out 89 winning trades. And 64 of these winners have been for gains of 100% or higher.

Larry is best known for trading stocks. But he’s also traded more than $500 billion in currencies over his career.

And as you’ll see below, he’s more excited about the currency market now than he’s been since he first started trading in the early 1980s.

It was 3 a.m. when the phone rang…

It was my broker. I’d told him to call me when the Japanese yen hit a certain price level. And it just had…

Groggily, I gave him a new higher price. And I told him to call me if it reached that.

Fifteen minutes later, the phone rang again. The yen had hit my new price level…

This was in the 1980s, when I first began trading currencies. And it was normal to see the yen shoot higher.

Back then, the media narrative was that the U.S. had lost its economic and technological edge… and that Japan was on the cusp of world supremacy.

The Tokyo Stock Exchange was worth about $4.9 trillion. That was just shy of the U.S. total market cap of $5.3 trillion.

Many thought yen would become the next world reserve currency as a result. But a collapse was already underway.

Japan’s central bank was trying to push down the value of the yen to make Japanese exports more competitive. So, it lowered interest rates from 6% in 1985 down to 2.5% in 1987… And set off the mother of all stock market bubbles.

When that burst in 1990, it sent the country into a “lost decade” recession.

Trading the yen through all this made 1980s and 1990s Japan one of the most exciting places to be. And it got me hooked on currency trading. Over my 35-year career, I’ve traded more than $500 billion worth of currencies.

But over the past decade or so, central banks around were all moving interest rates in lockstep. That ended the wild swings and big trading opportunities we had with the yen.

But lately, things are feeling more like they did when I first started trading currencies.

That means the currency market should be on your radar…

World’s Biggest Market

The currency market is also “forex” or FX, which stands for foreign exchange.

And it’s the biggest in the world.

It averaged about $7.5 trillion worth of trades a day last year.

To put that in context, U.S. gross domestic product clocked in at about $25.5 trillion last year. So, we’re talking a vast trading volume.

It’s one of the reasons I’ve traded so much in currencies 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’ve seen.

It’s delivered annualized returns of 6% versus about 8% for the S&P 500 going back to 1986. But the maximum drawdown – or peak-to-trough loss – was 15% versus 60% for the S&P 500.

And if you look at stress points, it’s even more impressive.

If you look back to the chart above, you’ll see this strategy weathered the Asian currency collapse in the late 1990s, the tech bubble collapse of 2000, and even COVID.

Given that the recent volatility shows no signs of waning, that’s a huge advantage.

Even better, FX returns aren’t correlated to stocks.

Dream Market for Currency Traders

That’s just a fancy way of saying they move independent of one another.

If two strategies have a correlation of zero, there’s no link between the two. And since 1990, this FX hedge fund index had a -0.08 correlation to the S&P 500.

That means FX trading is a great way to add diversity to your portfolio. It can work even when stocks are in a bear market.

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, we’ve been seeing crazy volatility again. This time in the U.S. dollar.

It hit a 20-year high versus the euro last year before falling 12%.

That’s giving us some interesting dynamics to work with.

This is happening because currencies are sensitive to interest rate moves. And as you know, the Fed has been jacking up rates like crazy since March 2022.

And higher interest rates mean higher yields for folks who park their capital in U.S. dollars.

Other countries are also raising rates. But each country is doing it at a different pace.

That’s causing a new surge in volatility in the FX market. And as I hammer on all the time, a volatile market is a trader’s dream market.

You have all these opportunities to trade. And the bigger the moves between currencies, the bigger your profits when your trades work out.

Of course, it also means higher downside risk. But over my 35-year career I’ve excelled at risk management.

It’s what got me featured in Jack Schwager’s 2012 book on the world’s best hedge fund managers, Hedge Fund Market Wizards.

I didn’t have a single losing year as a trader between 1990 and 2010. And that got Schwager’s attention.

In short, I ruthlessly keep my losses small. And I never swing for the fences until I’ve built up capital through a series of winning trades.

That way, the only losses I’ll take are out of my winnings, not my original capital.

How to Get Started

These days, you’re no longer woken up in the wee hours of the morning by your broker.

Many online platforms now exist to help anyone get started as a currency trader. You can get going with as a little as a couple hundred dollars.

But forex trading isn’t quite like trading from your stock brokerage.

For one, forex trades 24 hours a day, from Sunday at 5 p.m. ET through Friday at 5 p.m.

And you can easily use leverage to amplify your returns.

That’s a powerful tool. But requires very careful management to ensure it works for you and not against you.

That’s why I’m preparing a special session to educate traders on how to get started. It will go live on Wednesday, April 19, at 8 p.m. ET.

I’ll show you how you can harness today’s volatility to make potentially thousands of dollars every month trading forex…

I know a thing or two about profiting in tough markets. Last year, readers who followed my recommendations at my One Ticker Trader advisory had the opportunity to profit on 11 wins out of the 11 trades.

Here’s a list of those gains…

  • 20% in 5 days

  • 6% in 12 days

  • 2% in 4 days

  • 8% in 6 days

  • 12% in 2 days

  • 1% in 19 days

  • 24% in 2 days

  • 20% in 1 day

  • 23% in 1 day

  • 17% in 6 days

  • 21% in 1 day

As you can see, the longest trade lasted for 19 days… And the shortest trades lasted just a day.

And the average gain was 14%. That’s more than the roughly 11% average annual gain for the S&P 500 over the past 30 years.

And that’s during a year when the S&P 500 was down 19%… and the tech-heavy Nasdaq was down 33%.

So, I’m proud of that record.

And now, I want to guide you through the new opportunity that’s opening in the FX market. It’s where I plan to make some of my biggest wins as 2023 plays out.

You can RSVP with one click right here.

Regards,

Larry Benedict
Editor, Trading With Larry Benedict

P.S. Make sure to tune in for my Currencies in Crisis Summit next Wednesday, April 19, at 8 p.m. ET.

Not only will I reveal the best way for everyday investors to profit from this market… I’ll even share the name of my top currency to trade right now.

Go here to automatically sign up. I hope to see you there.