Forex Hedging

Forex Hedging is a concept that has become synonymous with trade protection and risk management. The idea first came to light when large institutional desks looked to methods to diverse their currency risk.  Holding large positions in single currencies meant that the institutions were exacerbating their risk parameters and a strategy was required to combat this problem. Traditionally hedging was used in futures and options trading as a means of effective portfolio management. Commodity traders and Mining companies use the futures market to hedge their price exposure. Daily movements and sharp swings in volatility in the commodity prices like gold or oil have caused many companies to adopt the strategy in line with their company mandates. Some producers wish, however, to leave their pricing risk subject to market conditions and variables.

Economics and the Forex Market

The volatility in the Forex market in the last 12 months can be attributed to significant shifts in the economic landscape. Some of the major currencies that have experienced increased daily and weekly ranges have been subject to tighter monetary policies. Although fiscal policy and taxation reform have contributed to the volatility, traders have concentrated on the carry trade opportunities within the market place.

What is Scalping?

June 16, 2010

Today we will look at scalping trades on the Forex markets. Scalping is a phrase used to describe a trade which is often only for the short term and also for a smaller profit than a regular trade. The scalper is exposed to a small risk but often many more times a day than a conventional trader. Any scalper must have a clear exit strategy, as the key to scalping is being ready to trade as many times as possible, and one large loss can wipe out many profitable scalp trades. Where an intra-day trader may look to trade four to five times a day, a scalper may look to trade hundreds of times a day, so keeping your money liquid is essential.