Forex

Is the carry trade coming back from the dead?

By Kathy Lien, Director of Currency Research, GFT If you have spent more than one month in the foreign exchange market, you have probably encountered the term “carry trade.”  A carry trade simply involves buying a currency with a high interest rate and funding it with a currency pair that has a lower interest rate. …

When is the best time to trade currencies?

When it comes to trading, everyone is trying to look for an “edge” but of course it is not easy to find. An edge can come in any form and is usually a small change that can make a difference. Many people, particularly new traders, do not realize that you can gain an edge in…

How to analyse price charts and use trading tools before you trade the markets

Market trading, like any mental exercise, requires a bit of knowledge and expertise before you really can give it a go. For many traders, that knowledge starts with not only having a sound trading plan, but also in techniques that help analyze a market in question – whether one wants to track and trade commodities,…

How does leverage work in a forex trade?

One of the major advantages of the spot forex market is the ability to use leverage to control a larger position than would otherwise be possible in more traditional markets. Most spot forex dealers offer leverage of 100:1 up to 400:1. Your amount of available leverage is usually determined when you open your account and…

How can you hedge a US portfolio of shares when the US Dollar is going down?

Hedging is a strategy used as a means of removing or at the very least reducing the uncertainty of exchange rate fluctuations on your portfolio returns. The method you employ to hedge your portfolio will depend on a variety of factors. The first step in choosing a hedging strategy is to quantify your exposure. For…

What is the uptick rule, and how does it affect forex trading?

US regulators revoked the “uptick rule” on the 6th July 2007. Previously the uptick rule, which was implemented in the 1930s following the US stock market crash, was designed to ensure it was more difficult to short sell stock. Under the so called uptick rule, a short sale may only take place if the market…

What are the essentials that every forex trading plan should hold?

Do you come out of the shopping mall with bag-loads of things you didn’t expect to buy? Then maybe you have an impulsive nature. That’s one of the aspects to consider when constructing a trading plan – the type of trader that you are. WHY YOU NEED A PLAN A trading plan sets parameters around…

What tactics boost profits trading forex?

Any time can be a good time for foreign currency traders, because they can seek profits in rising and falling markets. In the current market traders are seeing more opportunities than ever before, with big news and stgelopments affecting currencies every day. It’s a great time to make money – but also to lose it…

How do currencies move in relation to each other?

In order to be an effective trader, it is important to understand how different currency pairs move in relation to each other. There are a few reasons why this is significant, but most importantly, it allows traders to understand their exposure. As we have stated time and again, correlations between different currency pairs will inevitably…

Why do forex traders always talk about range trading?

No, range trading doesn’t require you to use a laptop while you are in the saddle….it is a way of taking advantage of markets where a clear trend exists, and prices range up and down within a well-defined channel. Range trading is a strategy that depends on selling highs and buying lows of a well-defined…