my home currency is euro and i have made currency trades in dollar and in brazilian currency. i need to compare or benchmark these trades. what is a suitable benchmark for these and also for leaving my euro money on deposit????
Trading indicators are best used along with money management and good risk control, using trading indicators alone will not enable you to be a successful trader, even if you learn everything about currency trading the market is just too random and unless risk is controlled, over time your account will slowly get wiped out, regardless how good a “trader” you think you are.
This question was about currency trading and there have been some pretty good answers that should help in your trading, and especially in relation to currency trading, the answer has been posted in the categories listed below:
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Just pick one of the three and track the other two in relationship to it. If I were you, I’d use the Euro since that’s your home currency. Divide your portfolio into thirds, one third of the portfolio value in each currency and periodically rebalance back to those proportions, that should automatically cause you to be buying when low and selling when high for all three currencies and it would only take a maximum of two transactions to rebalance.
The foreign exchange market is the largest and most liquid financial market in the world. Traders include large banks, central banks, currency speculators, corporations, governments, and other financial institutions. The average daily volume in the global foreign exchange and related markets is continuously growing.
Unlike a stock market, the foreign exchange market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest commercial banks and securities dealers. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and usually unavailable, and not known to players outside the inner circle. The difference between the bid and ask prices widens (from 0-1 pip to 1-2 pips for some currencies such as the EUR). This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread.
A list of benchmarks could include:
Euro Currency Trust (FXE)
DB Currency Index Value Fund (DBV)
Australian Dollar Trust (FXA)
British Pound Sterling Trust (FXB)
Canadian Dollar Trust (FXC)
Mexican Peso Trust (FXM)
Swedish Krona Trust (FXS)
Swiss Franc Trust (FXF)
WisdomTree Dreyfus Brazilian Real (BZF)
Just be careful and try to educate yourself. Don’t invest any money that you would actually need. Good luck!
EUR/USD
The pair has been rising constantly since the beginning of the week and is currently trading around the 1.2870 level. As the MACD on the 4-hour chart continues to point up, the pair could rise further, with potential to reach the 1.2950 level.
GBP/USD
The pair failed to breach the 1.5500 level yesterday, and as a result saw a sharp fall which took it as low as the 1.5365 level. The bearish move might continue today, with a key-target level of 1.5300.
The three most popular currency crosses in order are the Eur/USD, USD/JPY, and the GBP/USD. I would use any one of these three.