Risk Management
Controlling losses
One form of risk management is controlling your losses. Know when to cut your losses on a trade.
from wikipedia :
Risk management can therefore be considered the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events[1] or to maximize the realization of opportunities. Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attacks from an adversary.
Spreadbetting
What is spread betting?
Spread betting is simply a way of speculating on whether the price of an asset will rise or fall. You can gamble on everything from shares and commodities to stock market indices and house prices. The beauty is that you don’t actually have to buy the underlying asset you want to trade. You just take a view on the prices offered by the spread betting provider as to whether the price will rise or fall.
hedging
Hedging
Hedging is a way to reduce risk by taking both sides of a trade at once. If your broker allows it, a simple way to hedge is just to initiate a long and a short position on the same pair.
The advance traders use different pairs to make a hedge.
Trading Power Hours
When Are The Power Hours?
The Power Hours run from 8am to 12pm EST.
Yes, the most active trading period lasts only four hours every day! This is the US-European overlap session, which is the time when the world’s two most active trading centers cross — as the European session is closing and the US session is opening.
Which Currencies Should I Trade During the Power Hours?
Look for the following currencies to make the largest pip movements during the Power Hours.
- EUR/USD
- USD/CHF
- USD/CAD
- GBP/JPY
- GBP/CHF
The European Session
Look at the GBP/JPY and the GBP/CHF for strong price movements as European assets are converted into dollar-denominated assets. These conversions can cause the currencies to make strong price movements.
European Session Watch List:
- GBP/CHF
- GBP/JPY
- USD/CHF
- GBP/USD
- USD/CAD
The US Session
The US session is headquartered in New York. The GBP/JPY and USD/CHF show high volume and volatility during this time since their transactions require US dollars. Trading during this session becomes even more active when the US stock and bond markets open because foreign investors need to convert their currencies into dollar-dominated assets. The GBP/CHF often makes strong price movements during this period.
The US session runs from 8am to 5pm EST.
US Session Watch List:
- GBP/CHF
- GBP/JPY
- USD/CHF
- GBP/USD
- USD/CAD