Aug
14

forex trading hedging

By

forex trading hedging
"I can hedge against falling interest rates in the U.S. dollar by holding a forex position?

My rates CDs are falling because the Fed is pushing rates. That is also sending the dollar down. Since our economy is slowing the Fed will lower rates more likely. I'm thinking that if I choose a country which pays higher rates should offset most of my loss of interest income. I probably will not put a lot of money here, but rates of 100:1 forex accounts have a lot of leverage. Is this a good idea and if so, what coins have been good "carry trade" rates right now?

As the dollar goes down the EUR / USD and GBP / USD rises. Many people consider these works well against the falling dollar. Leverage is definitely one of the advantages of investing in the foreign exchange market (also can be a curse if someone does not know what they are doing.) I actually use a leverage of up to 400-1 in many of my long-term hedge positions. I am able to earn a daily interest rate (seven days a week) in these positions. There are long-term strategies that do not require constant vigilance and active trade mentioned in previous posts. I have a hedge position I have not touched for more than six months and is doing quite well. There are also no hidden charges and expenses when they participate in the Forex spot market. You only pay the difference between the sale price and the offer price to get into position. This is called propagation and is the initial "fee" to pay when buying a currency pair. There is no spread charged when the liquidation of his position. My best wishes for your success. Paul


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