Forex trading, also known as foreign exchange trading, is an exciting way to make money by buying and selling different currencies. The forex market is the largest financial market in the world, with over $5 trillion traded daily. Straddling the forex market is a strategy that can help traders make profits regardless of the direction the market takes. In this article, we will explain what straddling is and how to straddle the forex market in 2017.
What is Straddling?
Straddling is a forex trading strategy that involves buying and selling the same currency pair at the same time. This strategy is used when traders are uncertain about the direction the market will take. Straddling allows traders to make profits regardless of whether the market goes up or down.
How to Straddle the Forex Market in 2017?
Straddling the forex market in 2017 is similar to straddling in any other year. However, there are a few things to keep in mind to ensure success in this strategy.
1. Choose the Right Currency Pair
The first step to straddling the forex market is to choose the right currency pair. It is important to choose a pair that is highly volatile and has a wide trading range. Currency pairs such as EUR/USD, GBP/USD, and USD/JPY are popular choices for straddling.
2. Analyze the Market
Once you have chosen the currency pair, it is important to analyze the market. This involves looking at the economic indicators, such as GDP, inflation, and interest rates, that affect the currencies in the pair. It is also important to pay attention to any news events or political developments that may impact the market.
3. Place the Orders
Once you have analyzed the market, it is time to place the orders. Straddling involves placing two orders at the same time: a buy order and a sell order. The buy order is placed above the current price, while the sell order is placed below the current price.
4. Set Stop Loss and Take Profit Levels
It is important to set stop loss and take profit levels when straddling the forex market. Stop loss levels are used to limit the amount of loss if the market moves against the trade. Take profit levels are used to lock in profits if the market moves in favor of the trade.
5. Monitor the Market
Once the orders have been placed, it is important to monitor the market closely. Straddling requires constant monitoring, as the market can move in either direction at any time. It is important to be prepared to close out the trades if the market moves against the trade.
Conclusion
Straddling the forex market is a strategy that can help traders make profits regardless of the direction the market takes. It is important to choose the right currency pair, analyze the market, place the orders, set stop loss and take profit levels, and monitor the market closely. With these steps, traders can successfully straddle the forex market in 2017. However, it is important to remember that forex trading is risky and requires a thorough understanding of the market and the strategy being used.
