Forex Gap Because Forex contracts are futures contracts, there
isn’t really a Forex gap that the rest of the futures market can fill. You
can get involved in the Forex market with less money than you need
in the futures market, you can trade with high liquidity 24 hours
per day, and you have guaranteed stops. It doesn’t get much better
than that.
In discussing both the stock and the bond market, we talked
about how the Forex market is a nice complement to the investing
you are already doing and that you should continue to invest in both
the stock and bond markets. The futures market is really another
story. You can easily replace all the investing you are doing in the
futures market by investing in the Forex market. For example, if you
believe commodity prices are going to be going up, instead of taking
positions in multiple commodity futures contracts, you could place
one simple trade to buy the Canadian dollar. Canada exports more
commodities to the United States than any other country. In fact,
Canada is the United States’ largest trading partner. (We discuss this
in more detail later in the book.) As commodity prices rise, the value
of the Canadian dollar rises as well. So if you had a choice between
putting a lot of money into various futures contracts that do not have
guaranteed stops and putting a little bit of money into one Forex
contract that has a guaranteed stop and great leverage, which would
you choose?
The Forex market is an incredible profit-generating machine on
its own, and it is especially effective at filling the inherent gaps in
other financial markets. So if you’re investing in the stock or bond
market, ask yourself why you shouldn’t also be investing in the Forex
market. There’s no good reason. Investing in either of these two markets
without investing in the Forex market is like buying homeowner’s
insurance without buying an umbrella liability policy. Sure,
most of the things that happen to your home will be covered by the
homeowner’s policy, but there are other major claims that won’t be.
Do your portfolio a favor, and give yourself all the opportunities
available to protect what you have while making your money work
even harder for you.