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If your weekend plans include dropping a bet on the Super Bowl, don’t forget that Uncle Sam wants a piece of anything you win. Americans are expected to wager about $6.8 billion on Sunday night’s matchup between the Kansas City Chiefs and San Francisco 49ers in Miami. And no matter where you place your bet — whether at a casino, online, through a pool or ...
The blender company could have reduced this risk by shorting the euro and buying the USD when they were at parity. That way, if the dollar rose in value, the profits from the trade would offset the reduced profit from the sale of blenders. If the USD fell in value, the more favorable exchange rate will increase the profit from the sale of blenders, which offsets the losses in the trade.
The 2nd method is by performing a carry trade, where you can profit by buying a currency with a higher interest rate, and selling a currency with a lower interest rate. An example of this would be the USD/CHF (Swiss franc). If you buy USD/CHF, you are buying the USD, and their interest rates are higher than Swiss interest rates, so if you hold the position overnight, every day you hold the trade you will make money, and the money will be deposited in your brokerage account.
Both types of contracts are binding and are typically settled for cash at the exchange in question upon expiry, although contracts can also be bought and sold before they expire. The forwards and futures markets can offer protection against risk when trading currencies. Usually, big international corporations use these markets in order to hedge against future exchange rate fluctuations, but speculators take part in these markets as well.
Many traders enter into a tailspin of emotional trading and losing money after they hit a string of winners. The reason this happens is because they feel confident and euphoric and forget about the real danger of the market and that ANY TRADE CAN LOSE. The key to remember here is that trading is a long-term game of probabilities, if you have a high-probability trading edge, you will eventually make money over the long-term assuming you follow your trading edge with discipline. But, even if your edge is 70% successful over time, you could still hit 30 losing trades in a row out of 100….so keep this fact in mind and always remember you never know WHICH trade will be a loser and WHICH will be a winner.
Revenge – Traders experience a feeling of wanting “revenge” on the market when they suffer a losing trade that they were “sure” would work out. The key thing here is that there is no “sure” thing in trading…never. Also, if you have risked too much money on a trade (starting to see a theme here?), and you end up losing that money, there’s a good chance you are going to want to try and jump back in the market to make that money back….which usually just leads to another loss (and sometimes an even larger one) since you are just trading emotionally again.
GBPCAD has gained this week but it managed to still hold within the Ichimoku cloud in the daily timeframe. The price ran to a fresh six-week peak today at 1.7376, climbing above 1.7340, which is the 23.6% Fibonacci retracement level of the upward wave from 1.5875 to 1.7790, following the rebound off the six-month uptrend line. The technical indicators are ...
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GBP/USD bounced off support yesterday just prior to the BoE, and drove further higher in the wake of the meeting. The rally doesn’t mean much so far, though, as price remains well contained within a developing wedge that is seen as leading a meaningful move soon. A break above 13173 could get the upside going, while a break below 12954 may perhaps be even ...
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