Financial, Legal, & Realty

Isaac Gilinski Explains Short-Selling and Forex

Predicting the movements of financial markets is a difficult and risky proposition. When companies and individuals get a handle on the possible future movements of the market, they have an increased chance of enjoying a large profit. Financial forecasting firms like Brickell Analytics of Miami combine short-term sentiment analysis with long-term wave theory to provide their clients with early and accurate predictions, ultimately enhancing their ability to make money from volatile situations and global trends

Buying and selling foreign currencies is known as Forex trading. Investors make large purchases of foreign currencies in hopes of small changes in the exchange rate. It is a risky form of investment since such large amounts of money are typically exchanged.

The Forex market is easy to enter, with a minimum investment of $25. Individuals need to make sure that their computers and Internet connections are solid since trading often happens at unpredictable intervals. Since the market can be so volatile, it is recommended that everyone who trades in the Forex market have useful stop-loss tools in their investment software.

Forex has many advantages over trading in the stock market. Borrowing securities from the broker is called leverage. One particular advantage that the Forex market has over the traditional stock market is that investors can trade 2% of the contract size, where in the stock market you can only trade half of the contract size.

Forex can be a dangerous place for the uninitiated. Experts caution new investors in the Forex market to limit their liability until they know what they are doing. Since the markets are open 24 hours a day, 7 days a week, traders need to learn restraint and avoid trading at all hours of the day. They will eventually find out which hours of the day present the most movement in prices and confine their trading to those hours.

Leverages themselves present a significant level of risk. Forex traders are permitted to carry up to 200 times as much leverage as they have money in the markets. This can cause huge losses if the sale is not properly managed. Traders should make sure that they are not investing any money in Forex that they can’t afford to lose.

Brickell’s owner, Isaac Gilinski, is a Miami native. The company generates contrarian forecasts in the global macro markets, including exchange rates. They use various techniques like sentiment analysis and pattern identification to predict reversal points and trend changes. On April 11, 2013, when the Aussie Dollar against the U.S. Dollar was at 1.0541, Brickell forecasted a 20% drop in the AUD-USD exchange rate to the 0.85 level.

Simultaneously, as stated in a Forbes article from May 8, 2013, billionaire investor George Soros sold short the Australian dollar by $1 billion based on similar factors, believing that the currency was overvalued. He was able to take advantage of what he perceived as a future drop in the exchange rate.

Similarly, in 1992, George Soros made close to $1 billion working with Stanley Druckenmiller as his chief strategist. Druckenmiller forced a devaluation of the British pound, which earned Soros a fortune. Just as Gilinski and Brickell Analytics predicted a dramatic drop in the AUD-USD exchange rate in April 2013, on May 8, 2013, as per Bloomberg, Druckenmiller came to a similar conclusion, stating: “We think the Australian dollar will come down and will come down hard.”

Though most investors will not reach the volume or success of seasoned investors like Soros, they are encouraged to start small and take tolerable risks if they are in a position to do so.

 

Author Disclaimer:

The views, thoughts, and opinions in this article belong solely to the author, and do not necessarily reflect those of Isaac Gilinski, Brickell Analytics, George Soros, or Stanley Druckenmiller. Furthermore, the prediction made by Brickell Analytics was one of many predictions made by Brickell Analytics; not all predictions are accurate. Brickell Analytics does not provide any personalized investment advice, nor does it engage in trading of securities. This article should not be considered investment advice or an offer to sell or the solicitation of an offer to buy any securities. Soros and Brickell Analytics are not related parties, and Soros makes its own investment decisions. Neither the author nor Brickell Analytics can verify any profits or losses made by Soros. All profits are for illustrative purposes and are not a suggestion that similar or future profits may occur. Past results are not necessarily indicative of future results.  All investments involve risk and potential loss of principal. It should not be assumed that future investors will experience returns comparable to those of the research discussed herein.

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Adrian Rubin

Adrian Rubin is a freelancer, creative arts director for various marketing and advertising companies in the New York area. Adrian Rubin specializes in making memorable campaigns. You can learn more about his services here: AdrianRubin.net
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