Video: Currency Correlations and Diversifying
Investing in assets such as stocks, bonds, cryptocurrencies, futures, options, and CFDs involves considerable risks. CFDs are especially risky with 74-89% of retail accounts losing money due to high leverage and complexity. Cryptocurrencies and options exhibit extreme volatility, while futures can also lead to significant losses. Even stocks and bonds can depreciate quickly during market downturns, and total loss can ensure if the issuing company fails. Furthermore, the stability of your broker matters; in case of bankruptcy, the presence of an effective investor compensation scheme is crucial for protecting your assets. It's vital to align these investments with your financial goals and if needed, consult with financial professionals to navigate complex financial markets.
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Last updated: 28/07/2020
Portfolio diversification can be a good solution to minimize exposure and risk to the Forex market. A trader can implement different techniques to allocate part of the account balance into different assests and taking positions in different currency pairs based on correlation and diversification parameters.
Part of our multimedia library, learn in this video tutorial what are currency correlations and how diversifying your trades in Forex can help you.
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