Category: 3. Advance Trading Tips

Scalping is making a very short-term trade for a few pips usually using high leverage. Scalping typically is best done in conjunction with a news release and supportive technical conditions. The trade can last anywhere from a few seconds to a few hours. Many beginning forex traders start with scalping, but it does not take long…

A forex option is an agreement to purchase a currency pair at a predetermined price at a specified future date. For example, say you are long the EUR/USD at 1.40, and you feel that there is a chance that it will fall to 1.38 in overnight trading. Not wanting to risk a deeper reaction, you…

Position trading is trading based on your overall exposure to a currency pair. Your position is your average price for a currency pair. For example, you might make a short trade on EUR/USD at 1.40. If the pair is ultimately trending lower but happens to retrace up, and you take another short at say 1.42,…

Hedging is a way to reduce risk by taking both sides of a trade at once. If your broker allows it, an easy way to hedge is just to initiate a long and a short position on the same pair. Advanced traders sometimes use two different pairs to make one hedge, but that can get very…