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Why should we know what hard currencies are in our period? Hard currencies or safe haven currencies are important for investors because there will be a rush of money from all over the world to tighten the risk in critical financial moments therefore they will appreciate severely in a short time, as an example we can see how CHF appreciated from 2009 to 2011 against all pairs. What makes a currency a hard one? There are several factors in financial markets as; long-term stability of its purchasing power, the associated country's political and fiscal condition and outlook, and the policy posture of the issuing central bank , however we can see sometimes that some countries or union have exposure to high risk but still remain hard. For example, the U.S is at very high risks at the moment 1- head winds from the EU 2- debt issues known as fiscal cliff 3- deflationary risk from lower CPI and lower consumer confidence 4- lower credibility of FED according to political issues from Congress. As another example we can see the EURO which I strongly believe the risks are underestimated by market. There are several crucial risks there which might be 1- the EURO is not irreversible 2- debt issu…
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ante777 avatar
ante777 21 Jan.

Difficult issue.Good thoughts.

kelvindfxguru avatar

Difficult Question Indeed. I am thinking of it myself

SpecialFX avatar
SpecialFX 29 Jan.

I don't think NOK, SEK and DKK can be consistent safe-haven currencies for a long time, mostly because they are not very liquid compared to the majors. Also, the DKK is pegged to the EUR, so wherever the EUR moves, the DKK will follow :)

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Whether to be fundamental or technical has long been on debate, however retailers can't go after any since they are always in cloud of news noise or tied up with indicators.Most successful traders around the world are fundamental or technical and can't follow both and as traders we have experienced the time when the news has been in favor of a currency and it has lost weight or technically we look for a reversal, however the trend has continued. The question might be " how would we shorten the risk?" There are several rules to have in mind and most importantly you need to stay with mass capital in the market therefore economical situation of a country whose currency you are to buy must be considered but you need to avoid noises here after, what matters from economical point of view is the group of figures which show productivity as; GDP, CPI, Unemployment rate, and Manufacturing PMI. These figures don't change massively and by studying them on annual base and quarter base you can have a clear picture of strong economies around the world so you can have a strategy frame for what to buy and what not to.After having an image of a country economy you need to figure out what drives the …
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shahdad avatar
shahdad 7 Jan.

thanks bmg

Nicco avatar
Nicco 8 Jan.

To shorten risk (or risks) one must minimizing loses. The three most common mistakes losing forex traders make are:
1. Risking too much on a single trade
2. Trading during the doldrums between the London close and Sydney
open and overtrading during Asia without regard to the European open
3. Trading at the moment of news release.
( Horner, Raghee - "Forex on five hours a week: how to make money trading on your own time", Published by John Wiley & Sons, 2010)

shahdad avatar
shahdad 8 Jan.

thanks nicco

ante777 avatar
ante777 21 Jan.

Good article

SpecialFX avatar
SpecialFX 24 Jan.

One good method to reduce risk without negatively affecting profitability (because the two usually go hand-in-hand) is to increase diversification. Instead of trading 100k in one position, try 5 different uncorrelated positions with 20k each. The profit potential remains the same, but you only need one of those 5 positions to be profitable for the total loss to be lower than it would had been if you traded only one 100k position :)

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