‘Scalping the market’ |

There are different kinds of investors acting on the market starting from the speculators ending with the ones who create a long-term strategy. Still, both approaches vary within the preferences and behaviours. The article gives you a quick look at some short-term strategies.
FX market is characterised by high transaction volume. This is where you can make money in a minute as well as lose in a second. If you are emotional and worry about each penny it is not your kind of market.
Intuitively, some investors follow the trend of the exchange rate movement, buying if it goes up and selling if the trend changes. Nevertheless, there are some tips which can help in daily trading.
First of all, some currencies are more volatile than the others. Japanese yen (JPY), for example, could be referred to that class due to ‘Abenomics’, the monetary policy targeting the inflation. New interventions result in the currency depreciation in the short run as it, then, bounced back to its ‘real value’.

USD/JPY

Secondly, as the FX market is highly liquid, it responds quickly to the central banks’ announcements and news. Thus, following the monetary policy committee meetings and market news could be an important source of your expectations. If you go to the Bank of England web-page, look through any ‘Minutes of the MPC Meeting’, you can come up with some ideas, and, then, check whether the market reacts accordingly during that day. For Example, as to the minutes of the MPC meeting held on the 3rd and 4th of 2014, the British Pound should have lost its value. As it could be seen on the chart, rational expectations take place.