The Hong Kong dollar is a unique currency for lots of reasons. That’s why traders need to be doubly careful when they decide to take part in the popular USD/HKD Forex market. Hong Kong’s dollar is heavily traded but also completely regulated, unlike most other major world currencies. Many new traders avoid the USD/HKD pair and prefer to stick to more familiar currencies that behave in more traditional ways.
After several months of Forex experience, traders often gravitate to the USD/HKD pair and investigate it further. Like so many other currency pairs, it helps to be diligent and leave emotions out of the equation. For those who finally make the decision to trade this intriguing pair, it’s necessary to follow some of the tried-and-true Forex guidelines even more carefully.
Use Simple Strategies
New traders often feel the need to jump in and employ dozens of complex strategies with the hope that complexity leads to profit. On the contrary, many of the most successful traders use simple strategies when trading Forex, stocks, ETFs or bonds. Especially for traders who have less than one year of experience, it’s smartest to work with just one or two strategies that you know rather than six you barely understand. As you can see here, a professional platform makes a big difference because its automated features can free traders from having to worry about detailed strategies. For USD/HKD enthusiasts, a simple trading method is all that’s needed.
Study the Market and Specialize
Perhaps more than any other frequently-traded currency, the HKD calls for a good deal of research before any trades are made. It’s even more helpful for traders to specialize in the USD/HKD pair. That’s one way of developing a decent amount of expertise and depth in a pair that has as many unique characteristics as this one.
Never Break Your Trading Rules
Sticking to your personal trading rules is always a good idea, but when it comes to the USD/HKD pair, it’s almost a necessity. So many traders become frustrated after putting time and effort into a trade that ends up showing no profit. It happens to the best of them but is a tough pill to swallow sometimes. One common reason for losing trades is lack of discipline. A trader who has a rule about stopping losses can easily get caught up in the mindset that “things will get better soon,” and end up losing more on a given trade than personal rules would have allowed. Letting emotion get the best of you is not the path to success in trading the USD/HKD pair.
Understand the Uniqueness of the Hong Kong Economy
Hong Kong’s economy is unique in the developed world because its political structure is still in a state of flux. For a hundred years, Hong Kong was governed by the U.K. and enjoyed a free-market environment like no other place on earth. After political control reverted to China, the Communist regime of that country has pretty much allowed Hong Kong to itself but institutional traders worry about the future of the currency. For this reason and many others, traders need to spend extra time researching any USD/HKD trade before jumping into a position.