Posts Tagged ‘Forex strategy’

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How Often do High Volatility Events Take Place?

There is a difference between scheduled and unscheduled events. So, a central bank rate decision or a major economic release has the potential to be a high volatility risk event. When the market is uncertain of the outcome, then it can cause a high volatility risk event. For example, consider the central bank rate decision. Assume that the markets are pricing in for a 50%-50% for the interest rate announcement. This can cause high volatility […]

Quick Look at the Term Volatility Risk

What is the volatility risk in terms of the risk event outlook reports? Whenever there is a central bank meeting or a major economic release, it is accompanied by a risk event outlook report. So, you have a volatility measure, which gives the expected volatility from 0 to 100%. So, the higher the number, the more market moving, the event will be. The lower the number, the less market moving the event will be. When […]

Struggling to Pull the Trigger on Your Trades?

Are you struggling to pull the trigger on your trades? Are the trades that you are looking at are just not high conviction enough? Then you need to know about the following three tips to help you solve this problem. You should be conscious of what is happening in the market. You should be conscious of your emotions. You should feel confident about your trading. A trading psychologist, […]

What Is Price Action in Forex Trading

Price action is a term, which is extremely popular among forex traders. So, what is price action? In simple terms, you use price action in technical analysis to analyze an asset's movement over time,. A rising market is considered bullish and a falling market as bearish. For example, look at this chart. This market has been in a downtrend. Now, look at this chart. In this case, you conclude that […]

What Is the London Fix & How Does It Affect Forex Volatility?

Besides the London fix, you also have the Tokyo fix, and the New York fix. However, the most volume is contributed by the London session, more importance is given to London fix. It is during this session, the daily benchmark rates are set for the 21 major currencies and is implemented at 4 p.m London time, The hedge funds, money managers, and pension funds do their currency transactions with banks. […]

What Is a Carry Trade? How Does It Work?

The carry trade is a popular strategy used by forex traders, investment funds, and banks. This strategy is responsible for the flow of investments from one currency to another. This strategy takes advantage of the difference in interest rates between the long currency, with high interest rates, and a short currency. When you receive an interest payment on a currency position, that occurs every business day at 5 pm, Eastern Standard Time, the funds […]

Why Can’t You Just Copy Trades From a Professional?

While it takes many years to understand the basics of trading and master it, why not just copy the professionals? Yes, you can make lots of money from copying trades from a professional. However, you should take into consideration, the short-term, and the long-term risks involved. As soon as you start copying from a professional trader, you are not going to make profits straight away. It involves taking losses, […]

Top 6 Most Tradable Pairs for Diversification

You can diversify your portfolio using six currencies. The US dollar is seen as the denomination of the world's largest economy, which is influenced by interest rate policy and the Fed. Also, the dollar is seen as the benchmark that trades against other major currencies. The euro is the common currency of the European Union and controlled by the ECB, which makes monetary policy decisions. The euro moves slowly compared to the pound or the Australian dollar. The Japanese […]

Main Factors That Influence Exchange Rates

The exchange rate is highly correlated to other income factors such as interest rates, inflation, and capital gains from domestic securities. There are six factors that influence exchange rates. Differentials in inflation: When a country has low inflation, then its currency will appreciate in value. Hence, higher inflation leads to the currency's depreciation in value. Differentials in interest rates: Central banks like the Fed manipulate interest rates […]

Top Four Things Successful Traders Do

There are four things you need to know to become a successful forex trader. The right approach: You should align your goals and temperaments with the instruments and the markets that you are comfortable with. It means that you make sure that you are comfortable with a 5-min chart or the weekly chart. Are you willing to sit in front of the computer screen the whole day? Also, find a successful methodology […]