Forex Trading | by ForexCycle.com | Sunday, 31 May 2009 11:24 UTC
Before we get into determining strategies for forex trading, let's make sure we understand the core of Forex Trading. The forex market is a dynamic market place where foreign currencies are traded actively. This is normally done using brokers as the via media. Huge amounts of money is made or lost through these forex trades.
The retails traders are often unprepared of the road that lies ahead of them in the forex market and this article will help you avert heavy losses that may have occurred by diving straight in the trading of forex helping you in saving your hard earned money and assisting you in becoming a money-making forex trader.
These trades are done by:
The strategy for trading would accordingly depend on whether you are a businessman or a speculator. It is necessary to have a strategy simply because not having one is a sure shot strategy for failure. And that is not something acceptable to either the business man or the Speculator - one does not want to lose money on the forex market and the other wants to make money on the forex market. Again, whatever may be the objective, one thing is for certain - only the well informed actor achieves his objective.
Corporate or a Business House
Business Houses are exposed to the risks of the forex market because of their exposure to foreign currency dealing arising out of the contracts executed. Normally these houses shy away from taking risks in the forex market, reason being forex trading is merely incidental to their core business and not their core business. They do not like forex market risks to affect their carefully planned strategies for success in their business.
In such cases forex strategies revolve around how to ensure that their businesses are protected from the adversities of the forex market. They tend to be risk-averse in the sense that they do want the forex market risks to add to their bucket of risks that are associated with their business. What then, determines forex trading strategies for such business houses?
A Speculator is an investor. An opportunist. Combine these two in the field of Forex market and you will see an Operator who wants to make money using the volatility or the swings in the forex market to make money out of money.
Even the Speculator does not like to lose money, even as he would admit that the forex market trade exposes him to the risks of losing money. Such players in the forex market tend to win with their professional approach to the "game" and their personal attitude.
What would they do?
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