How does margin of safety apply to currency trading?

CFA General
#1

Or it doesn’t apply.

#2

I’m not a currency trading terminology expert… If you’re using the definition that value investors use of margin of safety, then it doesn’t apply. Otherwise, I guess it could apply if you are doing some sort of arbitrage trading where you wouldn’t enter the trade unless you could make at least X%. That X% could be your margin of safety?

#3

Nope - but risk management is very important in FX trading (and fortunately not very hard for plain vanilla forwards, futures, etc).

#4

Nope - but risk management is very important in FX trading (and fortunately not very hard for plain vanilla forwards, futures, etc).

#5

the margin of safety principle can be applied to FX trading or anything else. However, it would not be the “conventional” definition as defined by graham. Risk management is essentially “margin of safety” calculations.