Forex Risk Management: Understanding Risk On, Risk Off & Carry Trades in Forex Risk Management!

Forex Risk Management: Understanding Risk On, Risk Off & Carry Trades in Forex Risk Management! In order to trade with the 'wind at your back' it's imperative to market conditions from a risk point of view. When the market is considered to be 'risk off' it refers to a weaker appetite for risk from traders and investors and therefore more demand for generally lower-yielding safe-haven currencies, such as U.S dollar and the Japanese Yen. In these situations the positive gains from being long the USD and YEN (vs higher yield currencies) can offset the negative cost of carry. In addition when the market is in 'risk off' mode, there is generally selling pressure on equities. When the market is considered to be 'risk on' it refers to a stronger appetite for risk from traders and investors and therefore more demand for generally higher-yielding commodity based currencies ("comdolls"), such as the Aussie and Kiwi dollars. In these situations the positive gains from being long the AUD and NZD (vs lower yield currencies) coupled with the positive carry trade can provide exceptional returns / forex risk reward ratio. In addition when the market is in 'risk on' mode, there is generally a bullish bias on equities, and stock markets tend to rise. How well you can take advantage of these risk themes will depend on how well you can read the current market sentiment as well as finding those trades with the highest probability of being profitable taking into consideration the forex risk reward ratio. We'll be covering how to approach forex 'risk' in depth in this forex risk management video. See all my other forex trading videos here: http://youtube.com/CurrencyCashCow Learn real, actionable forex strategies and in-depth analysis that will have you trading currencies like a pro! - http://youtube.com/user/CurrencyCashCow Subscribe! Never miss another forex strategy video! http://www.youtube.com/subscription_center?add_user=currencycashcow Google Plus: https://plus.google.com/100625538175992850698 Twitter: https://twitter.com/CurrencyCashCow Get 'Paid to Trade' Forex & Earn Cash Every Month Regardless If You Win or Lose! Go to: http://forextradingarticles.com/cash-back-forex-review/ Forex News http://forextradingarticles.com/forex-news/ Live Economic Calendar http://forextradingarticles.com/forex-calendar/ Recommended Forex Books http://forextradingarticles.com/forex-books/ Worldwide Interest Rates http://www.global-rates.com/

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