publish2018-03-03 7:06 pm

backBack to the list of Articles

How to Avoid Exchange Rate Risk

Exchange rate riskForex trade or working with different currencies can generates some concerns about the risk for exchange rate modification. It is quite common that the currency quotes change over time sometimes in favor other against the trader interest. However, thanks to the development of indicators and price charts patterns and signals identification the exchange rate risk can be anticipated and diminished considerable when traders follow their technical analysis indications.

Trade the Currency Pair, Which You Have Studied or From Which You Have Critical Information

Forex trading is based on mathematical models, which are used to anticipate the next price moving direction. The exchange rate or currency quotes follows the free market essential rules. You must trade forex only on those currencies, which you have deeply analyzed and you are aware of all the social, political, and economic factors that influence its price quote. Price anticipation requires identifying market signals, price charts patterns, and indicators, forex traders follow the price and rely on previous studied patterns, which are repeated over time. Avoid guessing or trading by heart. Traders must follow their strategies and analyses, professional forex brokers never follow rumors or guess the future exchange rate.

Trade Undervalued Currencies

Trading undervalued currencies is as safe as you can go on forex trading; there are several undervalued currencies which price quote will only move higher over the near future. Those currencies are the best to get profits and reduce the exchange rate risk even if you want to hold them over time. Traders, who hold currencies over time, have to do daily technical analyses to avoid missing any reversal signs or an imminent price drops.

Hedge Your Bets

Hedging is the safest and only way traders can be sure the exchange rate will be equal or higher than their estimated price at the time when they would wish to sell it. Hedging is similar to an insurance; you buy for your bets to keep a minimum price to sell over time in case the exchange rate drops below any given quote at your maturity time. Hedging provides traders peace of mind by letting them know that no matter what, they already have a minimum selling price over time.

Take Advantages of Higher Interest Rate

Moving money from one low interest country to another with a higher and stable interest rate can make you get significant earnings and avoid any unfavorable interest rate variation on your forex trade. Look for Asian-Pacific countries with time deposits and saving account interest rate are up to 8 points higher than USA or the Eurozone.

Set Your Future Payment at a Fixed Exchange Rate or Forward Exchange Contract

Exchange rates are volatile, and the forex market is highly speculative. If you are buying futures or doing business in forex, it is recommendable to fix the exchange rate at which you will fulfill your financial obligations or do your payments to avoid any negative impact on the exchange rate variation.

Take Your Profits Early

Traders have to control greed and emotions. Traders never must wait until an exchange rate soars or plunge to buy or sell it. Taking your profits after they have grown but no reached the maximum point can decrease your risk of losing a price momentum an experience a price reversal. The same applies to buying never wait until the price falls below the floor since you could miss a great opportunity to buy low and sell high.

 

Relates Tips and tricks...

publish2018-04-22 5:52 pm

Bytecoin Review - Cryptocurrency Guide

Bytecoin is the first type of cryptocurrency which ensures that secure CryptoNote protocol can be used for the security of users. It provides 100% untraceable transactions with the help of ring signatures and stealth addresses. However, the algorithm of Bytecon which is known as CryptoNight was created by BCN developers in collaboration with CryptoNote team.

Read more...

publish2018-04-21 10:09 am

Bitcoin Gold Review - Cryptocurrency Guide

Bitcoin Gold is a new type of cryptocurrency which was designed by Jack Liao. Jack Liao is Hong Kong based mining enterprises. However, this currency is a clone of Bitcoin. If you have 1 BTC, you will be able to exchange it on 1 BTG. However, the creator has designed this currency with a purpose to become a better version than Bitcoin. This project was launched on global marketplace back in November 2017. Now, it is ready to grow a new coin generation.

Read more...

publish2018-04-20 5:01 pm

Swissborg Review - Incoming ICO

 Swissborg is a bank that will offer money related advice, speculation administration and other budgetary administrations for cryptocurrencies. They have been building a robo-consultant since 2015, and have chosen to reorient this to serve cryptocurrencies as opposed to customary fund.

Read more...

Leave a Reply

Your email address will not be published. Required fields are marked *

*

Economic Calendar

Powered by Myfxbook.com

The information contained in this website is for general information purposes only. This information is not an alternative to investment advice. Financial instrument and investment options are highly complex instruments, any potential client needs to study and fully understand the risk and financial implication before he engages or stars using any of those. We encourage searching for private and expert financial advice and getting sufficient knowledge before you start trading and every time you consider any financial instrument. Statrader.com is not licensed nor authorized to provide investment advice or investment services. Statrader.com does not promote, advice, or make any personal recommendation to clients to trade binary options nor to hire or work with any binary trade broker. This website is independent of binary broker featured on it. Before any client star trading or use any broker service, he must do his own investigation about broker legal license, registration and government authorization to ensure his suitability, and client must completely understand all the risks involve with any financial instrument and/or trading options or opportunities before he even considers start trading. The information is provided by Statrader.com, we make no representations of warranties of any kind, express or implied about the accuracy, reliability, suitability with respect to the website. Any reliance you place on such information is therefore strictly at your own risk. This Statrader.com has financial has financial relationships with some of the product you see on this website. Strader.com may be compensated every time a potential client click any of those links and/or open an account of hiring any of the services offered by third parties. Binary options trading entail a high risk for all potential clients to lose all of their invested money.

Copyright © 2017 · statader.com

Recommended Crypto Exchange for Beginners
bitbay banner
Popup