T2W Bot

Staff member
1,446 51
A brief look at the different ways in which an FX trader can diversify within their account.
While there are an unlimited number of publications covering the advantages of portfolio diversification, few of them explore the possibilities of trading Forex along with typical stock, bond and real estate investments.  It is even more rare to find theory on diversifying within a FX portfolio.  Although fund managers are very aware of the importance of diversity, speculators often overlook its value.  As we have all come to realize, you can?t expect consistent success by being a conformist. 
As all currency traders know, the Forex market is a great way to hedge the economic risk of a pool of investments.  Studies have even suggested that the Efficient Frontier?s optimal portfolio is actually shifted outward by including commodities.  Meaning that for each additional unit of risk a higher return is attainable.
Because markets are often driven by human emotion and unforeseen events, it is...
Continue reading...
 
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pssonice

Established member
900 12
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 differences. fundamentals and charttechnic as well as news are available the whole day long.
 

garethb

Well-known member
307 15
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.
 

a_gnome

Well-known member
434 15
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:
http://www.trade2win.com/boards/showthread.php?t=22364
(you need to scroll down to the 3rd page).

If this article is actually unrelated to this (and it is quite general and non-specific) then I apolgies to the author but there do seem to be a lot of similarities.
 
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martinengland

Newbie
3 0
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
 
Hedging

with a perfect inverse correlation, all risk is hedged but so is all return.
In inflationary times especially, thiswould result in a negative return vis a vis the real risk free interest rate. What is the point of this article please?
 

ShoomathY

Newbie
1 0
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