If you are like me when trading you are careful when choosing which exotic pairs to trade. High commissions, lack of information and liquidity are always the reason why people are skeptical when trading exotics.
You have heard for years how horrible the Mexican economy is, in reality, Mexico is the 10th largest Economy in the world and its currency; the MXN or Mexico Peso is the most traded Exotic Currency currently in the Market.
Most of the time I get questions about how volatile MXN is and that trading in MXN is just risky, which is true but given the interest rate differential, it makes it a pretty good long-term option in my view.
Trading Exotics, it’s not always a good investment, so you should be careful and trade only with the correct information available. I am currently following all there is to know on fundamentals, the major companies and most importantly the Banco de Mexico that provides amazing information on their website. Also among other resources, I have started following economist Dr. Teodoro Lavin Sodi who seem, to be a main figure for MXN Technical Analysis in Mexico, in my opinion, his analysis and views of the MXN and the Mexican market are brilliant so if you are trading Peso you should follow him also.
Investing in the Peso
When I started trading Peso I was in the same bucket as everyone I was not too sure, I did not want to plunge into positions without knowing all there is to know and honestly I was unsure about the Mexican Economy until a friend of mine showed me its profits, I for one wanted to know more and started digging to be better informed about the Currency Pairs involving Peso.
Having prime information is essential, do your analysis and find the right news sources, the news is helping me to understand Mexico and other emerging markets so that I can more intelligently trade before moving forward with any position.
I look forward to profiting more from Mexican peso and learning more on what and how things impact the economy, also look for clues when trading. For example, recently Sodi tweeted:
#Mexican Peso Still #Bearish after climbing to 19.11 in (#USDMXN), continues to #trade within Small Downtrend Bearish Channel.
To some, I would think it would be better if the Peso was more Bullish like we want for the rest of the stock market but for a day trader having key levels and an idea of what to look for is very important. So understanding fundamentals and key technicals including other available information better will help me to become a more informed investor as well. Perhaps, I might even decide an investment in the Mexican Economy would be a good plan.
We shall see.