In turn, this would cause the price of AUD/USD to fall – as fewer US dollars are needed to buy an Aussie dollar. That’s why the yen is commonly said to be under a ‘dirty float’ regime – as it is a floating currency, but not in the truest sense of the word. So, trading USD/JPY is a means of capitalising on these more regular fluctuations – if you’re able to buy and sell at the right time. For example, if you buy pound versus US dollar (GBP/USD), you are anticipating a rise in the pound at the expense of …

One of the strategy’s shortcomings is that there are many false signals. One MA can help catch a major trend, but before that, you might have to open several losing positions. That is why you have to set a stop loss for each position and allow the profit to grow, thus compensating for the previous losses. One of the most popular ways to trade MAs is the moving average convergence divergence histogram – known as the ‘MACD’. The MACD is an indicator we offer on our platforms and is useful as a momentum indicator. What some traders do, and what …

In strong uptrends and downtrends, these zones can indicate the levels of take-profits. When the momentum indicators’ lines break out the zero line downside, there is a potential sell signal. It means that the price of equity, futures, or a currency pair is starting a downtrend or a descending correction. Version 1 of the Momentum Indicator illustrates how easy it is to develop a trading strategy using this oscillator in conjunction with another indicator. In this case, the Average True Range indicator has been added to the chart. This may work, but it often forces the trader to enter at …

Partnering with other companies enables you to access their client base and vice versa. The approach allows you and your partner to cut down the costs in the long run. Forex partnerships prove effective in attracting a wider audience aside from being a cost-effective alternative. Regardless of the category of traders your company is targeted at, any Forex advertising model involves some form of client education. The field of foreign exchange is not the easiest to master, and every trading platform is based on solutions that require onboarding. Therefore, attracting Forex traders to use your company will not be an …

When trading volumes are heaviest forex brokers will provide tighter spreads , which reduces transaction costs for traders. Likewise institutional traders also favor times with higher trading volume, though they may accept wider spreads for the opportunity to trade as early as possible in reaction to new information they have. The best time to trade stocks also depends on various factors such as market conditions, stock exchange location, and personal preferences. However, most traders consider the first two hours of the stock market opening as the best time to trade. You usually want to avoid trading when only one trading …

If this wholesaler charges a customer from the EU €1000 immediately after sending goods, they might expect to receive £850 based on exchange rates on the day of the sale. They may not have to pay the invoice for something like three months. By the time the customer pays the value of the pound may have dropped and when the customer pays the bill of €1000, this converts to, say, only £800. Interestingly, forex dealers in the United States do not allow this type of hedging. Instead, firms are required to net out the two positions—by treating the contradictory trade …