Diversifying currency pairs to maximize profits and minimize risk
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3. Diversifying Currency Pairs to Maximize Profits and Minimize Risk Each and every currency pair behaves uniquely, with its own set of personality traits that affect its daily trading range and trending varieties. Many pairs tend to move together, usually due to relatively similar economies, correlated economic situations, or close geographic proximity. Subsequently, diversifying your currency pairs is an important step to mitigating risk, while simultaneously maximizing profits based upon the natural correlations between pairs.
4. Diversifying Safely " Instead of needing to purchase hundreds or thousands of stocks, a forex trader can diversify his portfolio with only a few well balanced currency pairs. “
5. Economic Diversification “ Over the long term, a country's currency movements often reflect the general health of its economy..”
6. Currency Diversification and Carry Trades “ Carry trade strategies are usually built around a strategically weighted basket of currencies. The goal is to create a basket that is interest neutral, one that is likely to either appreciate or stay the same in price.”
7. Under-diversification: A Common Portfolio Flaw “ New investors are more likely to under-diversify, often buying two pairs that trade near identically to each other. “
8. Diversifying Currency Pairs to Maximize Profits and Minimize Risk Whether you are a novice or experienced forex trader, diversification of your currency pairs is an important strategy to alleviate risks and maximize profits. .
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