Introduction to Trading Approaches

Asset Diversification

The foreign exchange markets offer investors the opportunity to diversify their portfolios from stock and bonds. Investors who diversify their portfolios, by including foreign exchange as an asset class, can lower the overall volatility of their portfolio. Stocks or stock indices even when varied by country or industry in your portfolio tend to move in synch. [more]

Technical Analysis

The foreign exchange markets are extremely popular among practitioners of technical analysis. The large number and variety of foreign exchange market participants make it ideal for technical analysis. [more]

Macro Economic Analysis

Changes in a country's macroeconomic situation can have a major influence on the value of its currency. Foreign Exchange traders pay close attention to countries' economic and political situations when making their decisions. [more]

Interest Rate Arbitrage

Many Hedge funds and institutional investors engage in the foreign exchange markets to find additional yield. Countries, such as Australia and New Zealand, which have high interest rates, attract funds from lower interest rate countries, such as Japan and the United States. Sophisticated international investors move money between currencies, like more conventional investors move money between different bond issues. [more]