If you’ve just started or if you’re making you’re way up the ladder, you obviously are in the lowdown of a normative approach to earn from forex. But, you might be tempted to think and often find out certain blind spots and very specific situations which can reap increased profit from it. Here are a few such unique tactics which you may or may not heard of; unique in the sense that they are rarely discussed upon and talked of even in traders’ forums or blogs.
What follows are secret trading strategies which, although are mostly circumstantial, can garner easier or larger profit margins with lower risk ratios.
2 unique and secret ways to earn from forex:
- Carry trading
You might have heard of this before and the concept of it appears simple enough for you to fathom. This is one of the easiest ways to earn with forex. In case you haven’t, here’s carry trading in a nutshell.
Investing in currency with low interest rates as attaché for buying currency with higher interest rates can give you guaranteed income from the interest disparity between the two. When you use a currency to buy or to buy with, you’re paying for using it as a security while on the other hand when you buy into a currency as an investment you gain interest by investing in it.
The only catch in carry trading is that of a decreasing price quote of the currency being bought into. For example, Bank of Japan (BOJ) allows easy investment into it due to low interest rates. Buying Japanese Yen and using it to buy long into USD will gain you much in interest difference. However, if the price-quote of USD substantially drops after you’ve bought into it via JY; you’ll be quite obviously looking at a loss. The interest difference will be much lower compared to the loss in asset value.
- Scalping in EUR USD and GBP USD
Day trading or scalping with Euro or Cable successfully requires umpteen experience and intuition not to mention knowledge which is a pre-requisite to earn in forex. Being the most traded currencies, these two pairs account for the maximum share of the average daily $5 trillion transaction. Thus, accordingly, these currencies are heavily influenced by investor behavior. Apart from the myriads of factors which affect every pair intrinsically, these pairs are can be forecasted upon by a mere crowd pattern analysis of investments.
Technical tools such as MACD line, A/D line, Elliott wave principle and OBV lines, if interpreted properly, can provide substantially to the point forecasts and garner handsome scalping profits. There are other extraneous variables which can affect these pairs obviously; they might also affect behavior of investors and therefore trends. But such happenstances don’t always occur, and more often than not gauging crowd behavior can earn on forex especially with the above-mentioned currency pairs.
So, here’s hoping that you’ve been enlightened enough on these two very common but unique trading situations to earn from forex. And if you’re thinking about investing, then there’s no time like now for it!