China’s Options for Dealing with “Hot Money” Flows

Part 5 of China’s “Hot Money” Problems. If the Chinese government determines it is necessary to take action, it has a number of options on how to slow down the flow of “hot money.” However, each option has potentially negative side effects. Appreciate — or Depreciate — the RMB. An increase in the value of […]


Causes of China’s Inflow of Hot Money

Part 3 of China’s “Hot Money” Problems. While there may be some uncertainty about the precise amount of “hot money” flowing into China, there appears to be a general agreement as to why speculators are moving their capital into China. Analysts point to two key factors: (1) the relative interest rates in China and the […]


Special Risks of Off-Exchange Forex Trading

Part 3 of Forex Trading For Individual Investors. Forex trading in general presents significant risks to individual investors that require careful consideration. Off-exchange forex trading poses additional risks, including: There Is No Central Marketplace. Unlike the regulated futures and options exchanges, there is no central marketplace in the retail off-exchange forex market.¬†Instead, individual investors commonly […]


Risks of Forex Trading

Part 2 of Forex Trading For Individual Investors. The forex market is a large, global, and generally liquid financial market. Banks, insurance companies, and other financial institutions, as well as large corporations, use the forex markets to manage the risks associated with fluctuations in currency rates. The risk of loss for individual investors who trade […]


Foreign Currency Exchange (Forex) Trading For Individual Investors

Part 1 of Forex Trading For Individual Investors. Individual investors who are considering participating in the foreign currency exchange (or “forex”) market need to understand fully the market and its unique characteristics. Forex trading can be very risky and is not appropriate for all investors. It is common in most forex trading strategies to employ […]