FOREX TRADING STRATEGIES AND TECHNIQUES – FOREX SCALPING, HEDGING AND NEWS TRADING

Tadawul FX supports all forex trading strategies and techniques without any restrictions. Investors and traders are permitted to use forex scalping, hedging, and trade in all market conditions including financial news releases. Tadawul FX welcomes implementation of all trading methods, entrusting clients to act professionally and in good will when working in the forex market.

There are hundreds of existing forex trading strategies, some of the most common being hedging, scalping, and news trading. Clients are advised to choose a particular strategy that works best for them and stick to it. Research shows that consistency in trading strategy yields better results and allows for higher profits whether trading long term or short term.

FOREX SCALPING

Forex scalping refers to opening and closing positions within a very short period of time, ranging from a few seconds to a few minutes. Unlike trend followers, scalpers are not concerned with the trend of the market and unlike news scalpers, they prefer to trade when the market is relatively stable. Scalpers are generally traders with small balances who look to capture small movements in the market. As the profit or loss from small movements is relatively low, the risk is minimized, nevertheless, scalping can prove to be a profitable strategy when many small trades are placed throughout the day.

Tadawul FX permits forex scalping strategy to be implemented by manual traders and Expert Advisor (EA) traders alike without restrictions.

FOREX HEDGING

Forex hedging is best described as a trading strategy that is used to offset the overall risk by taking opposing positions to the existing investments or trades in the market. If done correctly, having opposing positions gives traders more control over the bottom line as well as greater protection against losses and unwanted currency fluctuations.

Forex hedging has became a hot topic of discussion in 2009, when the regulatory body for US Forex Brokers, the National Futures Association (NFA), introduced a compliance ruling prohibiting hedging. The new ruling has not impacted Tadawul FX and we continue to support this strategy. TDFX Traders can continue to employ the hedging technique and take advantage of some of the most lucrative forex positions.

NEWS TRADING

News traders capitalize on the spikes or large movements in the forex market that are caused by the release of financial or socio-political news. The announcements range from economic indicators and predictors to current events, and can cause a significant stir in the market. News trading involves substantial risk, but also allows for tremendous profits and losses. News trading can be used in combination with hedging.

Tadawul FX supports news trading due to its ability to offer fixed spreads 24 hours a day. Clients can be assured that TDFX will not widen spreads or freeze rates.

Traders are also advised to remain cautious as market conditions can be highly volatile and unpredictable during economic data releases, with the heightened possibility of slippage and/or gaps. News trading is generally considered to be more risky, where losses as well as profits can be significantly magnified.

Tadawul FX aims to offer the best rates and execution available at any given time, regardless of the market conditions. As a preventive measure and an additional step to minimize the possibility of slippage, TDFX will widen new pending orders levels to 15-30 pips 5 minutes prior to and 1 minute post major economic news releases. The degree to which the levels are increased is based on the projected movements of the markets and the potential effects that these movements can create.