Valutrades is excited to offer a new method of payment for our clients -- Trustly!Read More
Investors of all stripes use hedging as a strategy to protect one position from adverse price movements. Typically, hedging involves the opening of a second position that is likely to have a negative correlation with the primary asset being held, meaning that if the primary asset’s price makes an adverse movement, the second position will experience a complementary and opposite movement that offsets those losses.
In forex trading, investors can use a second pair as a hedge for an existing position they’re reluctant to close out. Although hedging reduces risk at the expense of profits, it can be a valuable tool to protect profits and stave off losses in forex trading.Read More
Why do people trade? For most, their primary motivation is to make money. Sure, there are secondary reasons however they all stem from the undeniable urge to make money.
I will often ask this question at the beginning of presentations … who trades to make money? Interestingly, most people are shy or reluctant to admit that their primary motivation is to make money. Almost as if it is something to be ashamed of.
Let me introduce you to what I think is the great irony in trading. The primary reason why people trade, is to make money. Yet, it is the money that often causes people to make all the mistakes and not make money, because they focus too much on it.Read More
The main issue in December was the British election and its possible impact on Brexit plans. British Prime Minister Boris Johnson returned to Downing Street with a big majority after the Conservatives easily accounted for Labour in its traditional heartlands. Mr Johnson said it would give him a mandate to "get Brexit done" and take the United Kingdom out of the European Union next month. Earlier in the month, the U.S. Federal Reserve’s (Fed) Federal Open Market Committee had its two-day policy meeting, keeping interest rates steady, as widely expected. Unlike many previous meetings, the decision to keep rates unchanged was unanimous. After three straight interest rate cuts this this year, the Fed kept the funds rate in a target range of 1.5%-1.75%. More importantly, the Fed indicated that no action is likely next year while there is persistently low inflation.Read More
It is widely accepted that when you start trading, you never consider the most critical issues to becoming a consistently profitable trader. Often, all you can think of is how much money you are going to make and how you cannot wait to start.
When it comes to managing risk, an often-overlooked component is probability, or the likelihood of something happening. Even then, I strongly believe that many traders misinterpret the rules of probability. Some believe that if they have an unprofitable trade, somehow this increases the chance that their next trade will be profitable. If they incur a string of losses, they believe that their chance of a profitable trade increases as each unprofitable trade passes.Read More
The most dominant issues in November were the United States Federal Reserve (Fed) and their plan on interest rates, as well as the latest update in the Brexit and election saga. In the U.S., the spotlights are always on the Fed and at a recent conference in Washington, New York Federal Reserve President John Williams said that the Fed has interest rates at the appropriate level for the U.S. economy. "I think we have monetary policy in the right place. The economy is right where we would like it to be." Markets only see around a 25% probability of a rates move at the Fed’s next meeting on 10th – 11th December. The Brexit critics continue to roll up to have their say. Recently retired former speaker John Bercow says leaving the EU is the United Kingdom's 'biggest blunder since World War II'. At a dinner in London, Mr Bercow was quoted as saying, “I don’t think it helps the UK. Brexit is the biggest mistake of this country after the war. I respect prime minister Johnson, but Brexit doesn’t help us. It’s better to be part of the [EU] power bloc.”Read More
Unfortunately, many people who start trading find success difficult to achieve, especially early on. Trading is a challenging endeavour that has torn people from across the world across generations, from every extreme of their emotions.
It is our money that is directly involved in trading and therefore at risk, and the potential of making more money is our primary motivation for beginning this undertaking. Ironically, it is the money that encourages the vast majority to attempt to trade yet it is the money that causes most people to fail.Read More
The most dominant issues in October were the looming deadline for Brexit and whether the United States Federal Reserve (Fed) would cut rates again. The Brexit deadline of 31st October 2019, which has now been spoken about for a considerable time is no longer as the European Union agreed to extend the deadline by three months. European Council president Donald Tusk said the EU's 27 other countries agreed to accept "the UK's request for a Brexit flextension until 31 January, 2020". "The decision is expected to be formalised through a written procedure," he added. The latest extension allows the United Kingdom to leave earlier if a deal can be done. The Fed approved a widely anticipated quarter-point interest rate cut in the last week of October however signalled that there won’t be an more movement any time soon. “The Committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate,” the post-meeting statement said.Read More
Within the forex market, there are traders known as position traders (sometimes listed as “buy and hold” traders), who take positions for the long term. They base this on long-term charts and macroeconomics, and they operate in pretty much every market there is—including the hyperactive forex market.
Considering how the popularity of position trading is growing, it’s worth putting this market approach under the microscope. Here’s a look at the details behind position trading, along with how common traders use positions.