The high volatility level of foreign exchange markets is not easy to deal with. In fact, this issue is what draws speculators in. It’s also interesting to see the other side of the coin. There are many traders who argue that the forex markets are still highly-efficient. This means that it’s almost impossible having solid gains from them. Where is the truth? Somewhere in between.

AlphaFXC: generating profits in forex

There are numerous ways in which one can have profits in the forex markets. However, there is one that has been used for quite a while by a large number of successful traders. The “technical-type” back-tested models approach is based on rules.

Successfully trading in the forex markets has always had that aura of secrecy surrounding it. The reality is that things are not that complicated or secret. These models have been used for years and have generated alpha for many investors. There are three of them: trend, carry or differential model, and option strategies.

There are two other models, such as the channel detectors and the range trading models. However, these aforementioned ones are the most popular. Their common trait is that they all use recent past data in order to foresee future forex rate behavior. The forex rate itself can help in this case or data from other markets.

You can also combine these models as you cannot possibly expect them to work at all times. For example, when the volatility is low, you’d better use the trend and differential forward ones. It’s always nice to have options so you can switch between various models. You can also mix them in various ways and see what gives the best result.

 

AlphaFXC is a technology giant focused on the currency market. Generating alpha in the Forex markets is not an easy job but it can be done using the right approach. The high uncertainty in foreign-exchange markets has made them tempting to speculators for many years. Often a major currency pair, such as the dollar/yen, will change several percent a day, a nice occurrence if one has already developed the proper position. Alpha Securities Holding Limited can offer the necessary guidance when it comes to efficient Forex trading.

Ricardo Martinez

By Ricardo Martinez

Ricardo Martinez has been active in the financial markets for around 10 years. In the early days in his career he was a trader and worked as market analyst in different online brokers advising clients on key decisions of trading instruments in foreign exchange and commodity markets. Ricardo is currently working as independent trader with diversified portfolio over different markets. His writing for LearnMarketonline is part of his commitment to share knowledge with traders.