READ ALL THE

research reports in the world, but at the end of the day nobody knows what's going to happen next in the market. It's the infuriating and thrilling part of being in the game.

Although the market's future is always uncertain, the best approach is to take your cues from the market itself. The most immediate confirmation of a trade's potential is having a profit, even a small one, after a relatively short period of time.

Winning trades tend to start out as winning trades. Very seldom does an investment start out with a major decline only to turn around and rally 50% at least within a reasonable period of time. More often than not, traders tend to get bogged down during extended bear markets, exactly why it's usually better to cut a loss quickly rather than dig in and ride it out.

But because markets move in trends, when a trade ticks even a percent higher that's an encouraging sign that, at least for now, I'm on the right track. As an indicator, that beats a research report or brokerage recommendation any day.

Case in point is the Mexican peso, which has risen modestly since I wrote about it last monthUse the CurrencyShares Mexican Peso ETF to get exposure.) At least for the time being, the market is confirming my outlook.

Southern Exposure

CurrencyShares Mexican Peso (FXM) and CurrencyShares Australian Dollar (FXA) YTD

Secondary factors are also encouraging. Many other high-yielding "carry trade" currencies such as the South African rand, Turkish lira and Australian dollar have also moved higher against the U.S. dollar. The rand and lira are traded

, while the Aussie dollar is available via the

CurrencyShares Australian Dollar

Plus, there's no evidence this has become a popular or crowded trade among the "herd" with virtually zero blog, message board or media coverage. Yahoo and oil dominate the headlines these days, while the peso story hasn't yet even been told.

So while I trust my own analysis and judgment, once the trade is made it's a strong market and a quiet herd that are the most encouraging market signs you'll find.

Clinton Contracts

According to

, a real-time, real-money futures market for current and political events, Hillary Clinton's chances for winning the Democratic nomination for president have shrunk to 6%, down from 75% last fall. At the same time, her odds for securing the VP slot have risen from virtually zero near the beginning of 2008 to 15%.

President Clinton?

Hillary Clinton to be the Democratic Presidential Nominee Contract (price equals percentage chance)

Or Vice President Clinton?

Hillary Clinton to be the Democratic VP Nominee Contract (price equals percentage chance)

Also See:

• Exchange Seats Hint at Direction of Commodities

• When You Make a Bad Trade, Own It

• Technical Indicator Favors Japan Over U.S.

Jonathan Hoenig is managing member at Capitalistpig Hedge Fund LLC.