There is a reason why the Forex market is so attractive to wealthy traders and hedge funds…

In fact, it’s a well-kept secret among the trading elite.

This reason can be summed up in two words.

Low Correlation.

More specifically, the Forex market typically moves in distinct trends which rarely if ever correlate to moves in the stock market.

As a result, trading the Forex becomes the perfect compliment to an investment portfolio that is weighted heavily in equities.

It’s the old “don’t put all your eggs in one basket” kind of thing.

So how do you know it’s the right time to move a some (or more) of your trading/investing capital into currencies?

Good question… and that’s where the principle of volatility comes in.

Essentially, volatility is a statistical measure of the dispersion of returns for a given security or market index. In simple terms, the higher the volatility the riskier the security or the index.

Low volatility in the stock market typically bodes well for the average buy and hold stock market investor. In particular, low volatility can create bull market trends because investors are generally not operating from a place of fear.

At the same time, cycles of low volatility can actually induce a false sense of euphoria, because investors start thinking that their good run will never end.

Well… you can take off the blinders… because we know that bull markets don’t last forever.

To explain this idea a little better take a look at the S&P 500 over the past 5 years with the Volatility Index (VIX) laid over the top of it. The blue line represents the S&P 500 while the red line represents the VIX.

Volatility Index

From this chart you can see that around January of 2012 volatility hit a downtrend and has remained fairly settled with the exception of a few spikes here and there.

It’s during times of increased volatility that the currency markets are most attractive to investors.

Here’s how it works:

As volatility increases, assets and capital are shifted because risk is rising.

The most risk averse category of investor (which by the way is where the most money is) begins to shift their assets to less risky markets.

This always creates big trends in currencies… which can lead to very big gains when you know how to trade the trends in the Forex.

Let’s drill down further so you can see exactly how this works, and how you can benefit from it.

Below is a one year view of the VIX laid over the S&P 500.

Volatility Index 2

Notice here more recently at the beginning of October the VIX spiked up, which resulted in a slight pullback in the S&P.

During this same period of increased volatility let’s look what happened in the GBP/JPY currency pair.

Volatility Index 3

The red vertical line on the chart represents where the volatility spiked.

The red horizontal line on the lower part of the chart represents where a trader could have purchased the GBP/JPY currency pair.

The red horizontal line at the top of the chart represents where a trader could now have their profits locked in.

This move represents 1350 pips of movement.

If you had traded one mini lot you could have banked a tidy profit of $1,132.45.

Now here’s the beauty of this…

When trading the Forex, you are able to control a much larger amount of currency with a small amount of money in your account.

For example, you could have justified taking this kind of risk and earning this kind of return with as little as a $10,000 in your trading account.

Now for the big picture view.

Here’s a chart of the VIX going back to 1990. Notice about every 3 to 4 years volatility increases significantly.

Volatility Index 4

On the one hand, this typically creates a major free fall in the stock market…

Whereas in the Forex, it usually means big trends and big potential for gain.

In fact the more spikes throughout a given period of time the more trends are actually created in the currency market.

Since you are able to both buy and sell a currency with the same amount of ease…

This creates enormous opportunity for you when the VIX goes up and volatility increases.

Big institutional investors and hedge funds know this. They are able to capitalize in most markets at the right times… and you have the same potential.

By having a portion of your investment monies in the Forex, you are in a better position to take advantage of these highly volatile situations.

And even while average investors and even the big pension funds are losing their shirts… you could be singing a different tune.

Right now volatility is sitting near its all time lows, where it has been since early 2012.

So… you have to ask yourself if 2015 is the year when once again volatility increases again and the equities markets take a big hit.

If this is the case… and I believe there is a strong possibility for this to happen…

By having a Forex Portfolio Trader Robot, you could be in for a year of big trends, high volatility and potentially some significant gains.

Historically over the past 26 years, volatility has increased every 3-4 years. If this holds true then the low volatility of 2014 could soon be over and we could see a major shift in assets from equities to safer markets in 2015.

The key is to be prepared and not let fear or euphoria take you by surprise… which is what most average investors do.

Another key:

Keep the long term picture in view. Be mindful that nothing moves up in a straight line and let your gains compound over time.

With all that said, the Forex Portfolio Trader  is uniquely designed with the potential to capitalize on the volatility cycles…   And at the same time, it’s designed for long-term consistent growth as well.

If you haven’t already done so, I recommend you position a portion of your assets into currencies, as 2015 could be a breakout year in the Forex.

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