Low Risk Low Return FX trading
You don’t want to make a risky investment because you could make an intense investment that loses the principal, but you would like to expect some profit?
There is an investment method that can accumulate moderate amount of profits.
Low Risk Low Return FX trading is recommended for those who want to make a certain profit while balancing risk and return, and ultimately make a firm profit.
It’s not suitable for the kind of people who want to buy a car by making a profit in a short term period, but if you invest it with the intention of going to eat something tasty, you may enjoy Low Risk Low Return FX trading.
As an investment method, a certain amount of leverage is applied to secure profits from both price movements and interest rate differences (swap points).
Exness offers low spread cost through a number of major Forex currency pairs, and can be a suitable choice for traders who are planning for Low Risk Low Return FX trading.
Another great advantage of Exness is the Unlimited FX Leverage which can help you trade large amount of volume with small amount of margin in your live trading account.
What’s the merit of Low Risk Low Return FX trading?
The merit of Low Risk Low Return FX trading is that by limiting the risk, you can limit the loss and repeat transactions.
Of course, it may not work well at first, so you should increase the number of orders and hone your trading skills.
By carefully heading to the market, it is easier to understand what went good and what went wrong.
Very short-term price movements may be due to large-scale selling and buying by institutional investors, etc. and there are many unexpected wins and losses.
The market makes a big direction (trend) while mixing such amplitudes.
Profitability will stabilize to a certain extent when it becomes possible to make profit by riding on such trends rather than the amplitude of the moment.
What’s the demerit of Low Risk Low Return FX trading?
The disadvantage Low Risk Low Return FX trading is that while we should be in the investment activity for a certain period of time, there is a time when we can not see the market price even though we have a position.
We cannot look at the market price while sleeping or at work, so it is necessary to use stop loss orders and other measures to limit risks while trading in free time.
There is also the aspect that it is difficult to make a position from selling high interest rate currencies because we want to maintain the position to some extent and also aim for swap points.
USDJPY for Low Risk Low Return FX trading
After the Lehman shock, there was a period when the US interest rate dropped sharply and almost no interest rate was in the same way as Japan, but in December 2015 the US interest rate started to rise and is now 2.25% – 2.50 on a policy interest rate basis.
The interest rate level is higher than that of Australia and New Zealand, and swap points are also a currency pair that can be expected to some extent.
It is also a big point that it is easy to collect information on the US political situation, economic situation, etc.
Here are 4 tips when trading USDJPY.
1. Check important US economic indicators
The United States is the center of the world economy, and the market price may fluctuate greatly depending on the economic indicators released by the United States.
The five indicators that we want to keep in particular are employment statistics, retail sales, consumer price index, ISM manufacturing business index, and GDP.
You should confirm the announcement schedule of these indicators in advance and make use of them in trading.
It is better to check past announcements and price movements before the announcement too, and prepare for the future events and arrange the positions before an important indicator comes out.
2. Follow the activity of President Trump
You should pay attention to what the key person says.
Some US politicians and central bank Fed officials can change the mood of the market with just one statement.
First of all, President Trump.
In the past, there were not many cases in which the president made statements about exchange rate trends, but President Trump makes a tweet.
His comment can lead to unexpected situations such as long-term federal government closure as a result of confrontation with parliament, and each time the market moves back and forth.
So it’s a good idea to pay attention to what they said.
Next is Fed Chairman Powell. As the head of the Fed, which is responsible for US monetary policy, it has a significant impact on the market.
Monetary policy trends such as changes in policy interest rates and balance sheet adjustments call for a major flow in the market, so be careful about what you say.
At first, it’s a good idea to check how the remarks affect the quotes by looking at the quotes.
3. Not too much worry about Japan
There are not many cases where quotes from Japanese dignitaries, results of economic indicators, news, etc. affect the market.
Of course, major disasters also affect the market price, and it is different if there is a change of government.
However, ordinary political and economic news has a small impact on the exchange market, so you do not have to worry so much.
4. Be aware of trading opportunities from buying
Swap points are received when you buy a currency with a high interest rate and sell a currency with a low interest rate.
Interest rates in the US are now reasonably high, so it would be great to keep them for a week.
However, since profits from price movements are larger in most cases, if you get used to it, you will be able to enter successfully from selling, but at the beginning, you should get into the market by buying.
If you can earn a small amount of money every day, it often leads to a good amount of margin.
With Exness, you can start trading from small amount of margin.
For more information about fund deposit and withdrawal for Exness’s live trading account, visit the page here.
Use Ichimoku Kinko Hyo and moving average
For Low Risk Low Return FX trading, we recommend the Ichimoku Kinko Hyo and the short- and medium-term moving averages on a daily basis.
The most important thing in Low Risk Low Return FX trading is to grasp the trend from a few days to a week.
Firmly ascertain whether the market is facing the moving average or the Ichimoku Kinko Hyo.
Another important point for holding a position to some extent is at what level to place take-profit and stop-loss orders.
Especially, if you don’t have a habit of placing a stop loss order, you will lose a lot of money, so be careful.
The Ichimoku Kinko Hyo and the moving averages are quite useful in identifying points.
Especially when the clouds on the Ichimoku Kinko Hyo are close to the current level, stop when it clears the clouds.
Regarding the moving average line, in most cases you will use it in a span of 5 minutes or hourly chart in normal trading.
Are you just getting started with Exness to achieve your trading strategy?
Start from choosing the account type suited for you in this page.