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Diversification Within An FX Trading Account

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by Carley Garner -  Feb 15, 2007
4.4 (from 8 ratings)

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We have obviously just touched on the subject of diversity in the FX markets. Just as there are an infinite number of trading theories and strategies, there are unlimited numbers of ways to diversify any given position.  It is also important to note, that in certain market conditions hedging positions may fail resulting in losses on both legs of the spread.  Fortunately, this is relatively uncommon. 

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Recent Comments:
looking for a good non dealing fsa regulated broker with ideally accounts opening with say £2000 or a non dealing us desk. Any comments welcome
martinengland   14-04-2008 16:13:42
This article does look suspiciously like a prelude to the introduction of the Freedom Rocks method of trading. Since they have a multi-level marketing thing going on there seem to be a lot of posts on the "benefits" of hedging EURUSD with USDCHF and how this is "better" than trading out-rights and how somehow this is not the same as trading EURCHF. There is a lot of mis-information on this topic which I have tried to address in the thread on Freedom Rocks at: ...
a_gnome   20-02-2007 08:07:42
A piece of wooly thinking in the extreme. First "diversification" and "hedging" are bandied about as if they are interchangeable. And then it is recommended to trade a cross rate (only with double the costs - author must be a broker), as an example of what? a hedge?, diversification?, both?, neither? Right up there with Ms Garner's previous submissions.
garethb   20-02-2007 04:05:03
a lot of sentences are resulting in the one and only sentence : "In other words, traders should look to have a portion of their trading account managed by professional traders. The purpose of this is not to say that professionals will ultimately have better results than you, but is simply for the purpose of diversification. " I wont add anything worthless to this sentence. What is the main difference between trading the forex market and trading the stockmarket ? I cant see any...
pssonice   15-02-2007 07:09:07
Isn't the spread between the franc and the euro, the EURCHF cross rate?
theEdge   15-02-2007 05:45:55

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