A place for redditors to discuss quantitative trading, statistical methods, econometrics, programming, implementation, automated strategies, and bounce ideas off each other for constructive criticism. Feel free to submit papers/links of things you find interesting.
FOREX (Foreign Exchange market) or FX, is a global trade advertise where stocks and offers are not exchanged, however money. The arrival for the financial specialist isn't in the estimation of the money as such, but instead the relative trade estimation of one cash against another money. In this way, Forex exchanging is constantly communicated two by two, for example, Euro/US Dollar (EUUSD) or US DollaJapanese Yen (USD/JPY). By at the same time purchasing and selling sets of monetary forms, the financial specialist, or theorist, would like to benefit from an ideal swapping scale change. In contrast to the American stock trades, the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ), Forex exchanging is more unsurprising than stocks. One procedure that the Forex speculator utilizes is a strategy that comes from the suspicion that all data about the market and a specific money's future variances is found in the value chain. As such, a speculator essentially sees what has befallen that money in the ongoing past, and predicts that the little changes will for the most part proceed with similarly as they have previously. Another methodology for the Forex financial specialist is to dissect the nation of the cash's economy, political circumstance, and other potential bits of gossip. The speculator can likewise foresee such things as political agitation or change that will likewise affect the market. Forex is the biggest money related market on the planet taking care of somewhere in the range of 1.5 and 1.9 trillion US dollars daily. The mix of rather steady however little everyday vacillations in money costs, make a domain which pulls in financial specialists. In view of the liquidity of the market, in contrast to some once in a while exchanged stock, brokers can open and close situations inside a couple of moments as there are continually willing purchasers and venders.
What are the risks?
On account of the sheer size of the Forex Market, it guarantees more noteworthy value dependability and more noteworthy influence. Additionally, with worked in insurances, for example, well-being edges, programmed limits for purchasing and selling, and other hazard assurance quantify, the probability of winding up in the red in any event, when the Forex showcase is unpredictable is definitely diminished. Moreover, due to its size, it is close to unthinkable for a solitary financial specialist to fundamentally influence the cost of significant cash. Be that as it may, all Forex merchants ought to know that the market is one of the most fluid around and subject to solid money patterns. While influence figures of up to100:1 are conceivable, without sufficient hazard insurance set up the hole among benefit and misfortune can be emotional. Indeed, even veteran Forex brokers can be gotten out every once in a while and endure huge shots. With this kind of speculator theory, the brilliant guideline must be: don't change beyond what you can bear to lose. Read more at Visit us on https://futurefx.com/
Nigerian banks to limit debit card spending abroad to ease forex risk
Stanbic IBTC Bank, the local unit of South Africa’s Standard Bank, said it will halve the spending limit for offshore card transactions to $500 per month from Monday and will limit cash withdrawals to $100. Another top tier lender Zenith Bank said it will temporarily suspend the use of debit cards abroad for cash withdrawals and cut the monthly spending limit abroad by more than half to $200. Other lenders — Ecobank and Fidelity Bank — have also lowered withdrawal limits for individuals while abroad. https://www.today.ng/business/finance/nigerian-banks-limit-debit-card-spending-abroad-ease-forex-risk-307674
Myforexeye is one of the top forex risk management techniques services provider in pan India. You can save your money and time by helping you develop a risk strategy tailored to your business needs. We provide the complete solution in forex risk advisory management for more details. Visit: https://www.myforexeye.com/services/forex-risk-advisory/
I wish to understand Forex risk and its impact on returns for foreign funds. Would appreciate responses to my hypothetical scenario below. In this scenario Currency A is the local currency and USD is the foreign currency. Now, let's say Currency A improves from 4.50/USD at the start of the year to 4.05/USD...meaning it appreciates by 10% to the US dollar. At the same time, let's say that Fund A is a mother fund which invests in the United States (in USD), and it sees a 10% returns for the year. If we invest in Fund A though a local Fund B (in Currency A), is it fair to say that at the end of the year the Currency A appreciation could wipe out most/all of the gains that the underlying mother fund made in USD terms in the US markets? PS: Assume a linear 10% currency appreciation and a linear 10% gain throughout the year i.e. they increase in lock with each other and forget about management fees for the local Fund B.
What are the best securities to hedge forex risks?
I want hedge the risks of these currency pairs: USD/CNY, USD/CAD, CAD/CNY What are the best financial products to achieve it? I need leverage, since I don't want to spend one dollar to hedge the risk of one dollar. That would be way too capital intensive. I need certain liquidity. I need to hedge the risk of holding one of the three currencies for 1-3 days for 50,000 USD. Any securities not limited to ETF, futures, CFDs, options. Any help would be appreciated!
I've written down two scenarios below from the point of view of a US citizen investing in an Indian Equity Fund and would like to know roughly how will the Forex Risk play out in each scenario (i.e. the net performance after the 1-year period). 1) Underlying 1-year fund performance in INR: 30% USD appreciates by 30% to the INR in that same 1-year period. 2) Underlying 1-year fund performance in INR: 0% USD depreciates by 30% to the INR in that same 1-year period. Would it be fair to presume that in Scenario 1 the gains are cancelled by the appreciating Dollar, while in Scenario 2 the Dollar's depreciation results in roughly a net 30% returns for the year?
https://www.safeinvestingsites.com/minimizing-risk-in-the-forex-trading-useful-software-forex-trendy/ Why did Forex Traders fail? One of the reasons is the lack of risk management! Most people try Forex trading because they heard or read the success story of Forex Trader somewhere. He may be a relative, friend, or experienced trader. They jump into Forex trading and here they get the option of Leverage or margin. Every Forex trading account provider allows you to trade big against less balance in your account. It is good but only experienced traders can use it for profit. It gives you a bigger chance to earn money but, even bigger risk opens, as you may lose entire money in your account in just one trade!!! It is no joke. It happens to every trader because of shame he doesn’t tell others about his huge loss. There are many reasons to fail in Forex trading like over trading, trading addiction, not adapting to market conditions, trade without a proper plan, and most important unrealistic expectations. The trader expects a huge profit in a single trade and even if he is in loss, he doesn’t exit the trade by taking a minimum loss. He waits, waits, and waits until the end. The result is obvious. Huge Loss! Here comes the Forex risk management calculator to help you. There are many Forex risk management calculators in the market. You can download it from the Google play store. Using the Forex risk management calculator you get an idea about how to trade safely in the Forex market
Funds operated in EUR and subject to forex fluctuation into GBP: what are the risks?
Title explains most of it. There are some funds out there which state that they are operated in foreign currencies. Example: Many of Triodos' funds, which have the following caveat:
The fund is operated in euros, but we’ve priced it in sterling for UK investors, so your return is subject to the sterling to euros exchange rate. You're also exposed to currency fluctuations in regions the fund invests in, and any changes in exchange rates may affect the value of your investment.
Part of me thinks this isn't a problem, surely any fund that isn't solely invested in UK businesses is therefore having to deal with forex risk, let alone huge global funds, and that this is perfectly normal. On the flipside, being exposed to principally one other currency's fluctuation seems riskier as you can't spread that risk across many. Am I being barmy? (and no, you're not allowed to reply "yes" just because I'm thinking about a so-called 'ethical' S&S ISA...) ;)
There are some types of the risk management in forex trading.
As you know, every trade on the currency market is exposed to some level of risk. To reduce possible losses and increase the profit, traders use some methods of the risk management. Previous Analysis: First of all, you should do previous analysis. You need to have the objective reason for the opening of the position. If a trader understands what is going on Forex, he can increase his chances on good profit. Previous analysis consists from the analysis of current news, determining of the High and Low of the day and identifying of the current trend on the long timeframe. The Creation of the Trading Plan: The second method is creating and following the trading plan. Each trader has his own trading strategy. One uses fundamental analysis, another uses technical analysis only and someone uses just his intuition. The difference is in the profit of the strategy for each trader. You can create your own strategy, or use already existing one and adjust it for yourself. The trader can analyze his mistakes and not repeat them in the future, if he uses definite algorithm and follows its rules. What else can help is not to follow the emotions while trading. Any strategy has to be profitable on the long term. It’s better not to start trading on the real account before the trader has good and stable results while using the trading strategy. How to Manage your Forex Risks : Determining the percentage of losses is another method of the risk management. The methods, the essence of which is the valuation of the losses in the trading period, will be more useful. Further, it’s necessary to make the diversification of the trades. It’s not recommended to use more than 5–15% from the total account deposit per one order. One should not forget that many currency pairs correlate with each other. It’s better to deposit the sum, which is on the free usage. The next method is the using of the stop losses. You should place the stop when/after opening the order. Usually, this method is not applied while using the scalping strategy. However, trading without stop loss is very dangerous. Also it’s very important to admit your mistakes. In case you have made some mistakes, you fix the losses and you should analyze the situation. It’s not recommended to try to "outstay" the losses. If the losses are increasing and the price is moving in the opposite direction, it’s better to close the order.
Forex Risk Management is the single most important thing to master. But it’s also a broad topic. Let’s narrow it down and give you something you can actually use right now. You may want to watch the video just for the visual aspect of it alone. FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosure. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. 5 Forex Risk Management Tips You Can Use Now. Understanding and being able to use Forex risk management strategies is crucial to helping you minimize your losses and take advantage of the profits when they come. If you don’t have a full understanding of how you should manage your trading money and risk, then you could face the issue of losing ... Understanding Forex Risk Management. FACEBOOK TWITTER LINKEDIN By Selwyn M. Gishen. Updated Aug 5, 2020. Trading is the exchange of goods or services between two or more parties. So if you need ... Foreign Exchange Risk Example . An American liquor company signs a contract to buy 100 cases of wine from a French retailer for €50 per case, or €5,000 total, with payment due at the time of ...
Forex Basics - Lot Sizes, Risk vs. Reward, Counting Pips ...
Risk Management is fundamental to staying in control of your account. This video explains what we teach our traders about risk management In today's Forex scalping tutorial, we will be looking at and demonstrating some of the key concepts of risk management required for you to put yourself in the best position to succeed as a Forex ... What's up! I'm Hannah and I'm learning how to trade the forex markets. Join me as I document my forex trading journey through film, sharing the ups and the d... #forex #forexlifestyle #forextrader Want to join the A1 Trading Team? Follow along with trades taken by our top trading analysts, join our trading chatroom, ... EAP Training Program - https://eaptrainingprogram.com/video-sales-page Pro Trader Report - https://protraderreport.com/ptr Free Spreadsheet - FREE course 3 -...