Are You an Experienced Investor?

by admin on January 29, 2014

Foreign exchange companies, investment management firms, and hedge funds are some of the major market participants. Forex trading takes place on the forwards, futures, and spot markets and involves different electronic trading strategies.There are actively traded currencies such as the British pound, Euro, New Zealand dollar, and others. Some traders focus on commodity currencies while others trade majors and exotics.


Examples of majors are EUR/USD, AUD/USD, and GBP/USD whereby different major currency pairs are combined with the US dollar.money_ Some currencies are positively correlated while other pairs are more volatile. In addition, there are commodity currencies such as the Canadian, New Zealand, and US dollar. Developed and developing countries have commodity currencies. Countries such as Venezuela, Nigeria, and Saudi Arabia are rich in natural resources. Crosses do not involve US dollars but currencies that are heavily traded. The Japanese yen, Swiss franc, and New Zealand dollar are examples. Then there are exotics that include currencies of emerging economies and developing countries. The U.S. dollar vs. the Turkish lira is one example.

It is seasoned investors who trade exotics. The reason is that they are less liquid than crosses and majors. One option is to create a watch list, i.e. NZD/USD, AUD/JPY, XAG/USD, etc. List top traded currency pairs such as NZD/USD, USD/CAD, and EUR/CHF.

Trading strategies range from simple to complex and advanced. General strategies to master include martingale, MACD strategies, moving average, Bollinger Bands, the RSI indicator, and others. Investors have different trading styles – some focus on fundamental data while others use indicators and timelines. They also consider factors such as government budget surpluses and deficits.

Look at information sources that feature charts, a weekly strategy outlook, strategies for beginners and experienced investors. Some investors also use speculative strategies to make profits. Common strategies include volume, supply and demand, support and resistance, and trend trading. Investors use strategies such as basket and divergence trading. You can also choose between different types of accounts, including micro, mini, and standard accounts. Micro accounts are offered to new investors. Novice investors use demo accounts to test different strategies. This helps gain knowledge of the currency market. Forex trading is for experienced investors with a high risk profile. Money market mutual funds and bonds are relatively safe to invest in.

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