On April 25, I was interviewed by the Singapore Straits Times. We had a wide-ranging discussion dealing with topics such as my worst trade ever, my best trade ever, and what's next for the currency markets. The following is an excerpt
His best investment move: short-selling the US dollar
Forex trader is bearish on greenback and suggests holding instruments that will rise when dollar falls, like gold or other currencies
By Lorna Tan Finance Correspondent
Ask professional foreign exchange (forex) trader Ed Ponsi for his view of the United States dollar and his forecast is that it will continue to decline.
In fact, he believes that benchmarked against the greenback, the Singdollar will strengthen to $1.30 from the current $1.35, the yuan will rise to six, while the euro will strengthen to US$1.70 to US$1.75 by the end of the year.
This is why the American is shorting or selling dollars and buying other currencies like the yuan, euro and, in particular, the Hong Kong dollar, as he believes the Hong Kong government will strengthen the HK dollar by re-pegging it against the US dollar within the next one to two years.
Mr Ponsi was in Singapore recently to publicise his latest book, Forex Patterns And Probabilities. In it, he provides strategies and discusses specific mechanics of currency trading such as the best ways to enter, exit and manage trades.
Besides carrying out his own currency trades and trading on behalf of institutional clients, he is the founder and president of educational firm FXEducator.
'Don't hold greenbacks, as the value of the dollar will go down. Instead, hold things that are valued in US dollars that can appreciate when it falls, like gold and other currencies.
'If you think the dollar will continue to fall, which I do, short it. One way of doing so is to buy a contract on the US dollar Index, which means that you are betting that the dollar will fall against a basket of currencies,' said Mr Ponsi.
However, he cautioned that whatever currency bets investors make, they should never risk more than 2 per cent of their wealth on the bet.
Forex was not his first love. He said he became interested in investing because he used to own a food distribution business that allowed him free time in the early afternoon.
'I would get home and turn on the business channel, and I was fascinated by this whole new world. I decided that I wanted to learn everything I could about trading and the markets,' he recalled.
Egged on by his new passion, he sold his business and traded stocks for almost a decade before he discovered the exciting world of forex trading in 2002
