Carry trade is a Forex trading strategy that is very different from other Forex trading strategies in the way that it operates. All of the Forex trading strategies that we normally use are based on the concept of buy low/sell high as the basis to all Forex trading.
So far we have discussed many Forex trading strategies that allow us to analyze the price action from many different angles. These strategies give us the technicals but there's one factor that always has the potential to make all of the technicals irrelevant and just take the market in every way that it likes. Big announcements or news coming out of different countries can have a huge effect on the market, rendering all our analysis meaningless.
Big investors, hedge and pension funds as well as good traders lay out plans and strategies in advance, usually before the quarter or a new year begins on both, fundamental and technical outlook. So we are suggesting a strategy to figure out 2015 in advance. I know that there are many factors to take in consideration which might affect the financial and especially currency markets, some of them can´t even be anticipated, like conflicts, natural disasters etc. Still, we have to prepare ourselves as best as we can with whatever is available to us.
Market sentiment is the momentum of the market. All traders, small or big, have an opinion when trading in the Forex market. Some might be bullish and some might be bearish. The market sentiment is all their opinions combined, even yours if you are trading.
The forex market can be very volatile. But we can turn the volatility in our favour with certain trading strategies, such as widening targets, low leverage, portfolio diversification, minimize risk etc.
Arbitrage has been occurring since ancient times. Arbitrage is more of a speculation strategy, where someone attempts to profit from market inefficiencies and take advantage from price differences of the same instrument either on the same market or on different markets. Finding the right conditions and applying an arbitrage strategy is not easy because everyone is looking for that little loophole in the market in order to make a profit.
Fair value strategy shows which one of two economies is in the best shape. You evaluate and weigh each sector of the economy to see the performance of the whole economy.
The British people voted whether to stay in the EU or not on 23rd of June. This move has great implications for the Pound prior and after the referendum, as well as the Euro.
The central banks shift interest rates to help the economy and inflation. But these moves have a great impact on the forex market and related currencies.