Currency Converter - Exchange Rate Calculator for Trading

Volatile currency pairs are those that experience large swings in price over a short period of time. This can make them attractive to traders looking to profit from large price movements. But volatile currency pairs can also be risky as they can quickly move against your position.

Continue Reading at How to Trade Volatile Currency Pairs

Currencies can have both positive and negative correlations with each other. Positive correlation means they tend to move in the same direction, while negative correlation means they move in opposite directions.

Continue Reading at Lost Before Trading: Three Reasons Why Novice Accounts Collapsed

If the price moves erratically and you don't see any confirmation until it is too late, both stop losses might be touched, and you might gain double loss compared to if you did not hedge, as much as the gap between both positions. Few traders are able to do this successfully, so it's not widely recommended for new traders.

Continue Reading at Introduction to Forex Hedging Strategy

Hedging in the same pair is done by opening a new position in the same pair you have already opened before. This is the simplest form of forex hedging strategy.

Say, you expected the USD/JPY to go down from 103.75 to 103.49, so you sell the pair. After a while, the price moves upward, even breaking the previous resistance of 103.87. Still, you are unsure whether the move is real or the price will revert downward later. You opened a buy position in the same currency pair to hedge your way. That is hedging. In addition to opening a new position to the opposing direction, you could add a stop loss to both orders up to a certain level to consider whether the direction is confirmed up or down.

Continue Reading at Introduction to Forex Hedging Strategy