ABC'S OF Forex - Interpreting Foreign Exchange News
Knowing the ABC's of forex is a precursor for making money in the foreign exchange market. Knowledge of the basics of technical analysis is inadequate because the foreign exchange markets are operating on more than the mathematical components. Failure to do so could mean cause misjudgement at a critical point.
There are major influences wielded by news reports both global and local on the currency market. While finance related news without a doubt yields the greatest effect, other non-finance but major events have their own impact too. They are possibly anticipated or come spontaneously .
Events like the destruction wrought by Hurricane Katrina or 9/11 are unexpected events which may impact the currency exchange market. In such cases all that can be done is damage control by way of building up stop losses.
An example of predicted events would be the holding of a major international conference in a particular country. Its local currency may undergo an increase in currency value due to investor confidence.
Conversely, the countries who were not selected may be affected negatively. Thus advance knowledge of such events are imperative to forex traders.
Daily status and analysis about the financial sector have corresponding effects. Others released irregularly are economic indicators such as GDP, interest rates and inflation.
Currency trading always encompasses two currencies, a fact that you must keep in mind. Trading in your own currency provides you with the luxury of a lot of data but this may be at the expense of ignoring key information about the other currency.
The US is a case in point due to the avalanche of data on the dollar coming through the foreign exchange wire. Trading the greenback to a relatively smaller currency further boost this effect. Committing to memory that fact will guarantee that your market data is always two sided.
Being a novice trader is no excuse for being oblivious of this basic scrutiny of the foreign currency market. Departing the market before major news events is always a shrewd move for the newbie.
A method based on fundamentals may take form as you become savvier in the market. But more than anything else familiarity with the forex fundamentals is paramount . - 23223
There are major influences wielded by news reports both global and local on the currency market. While finance related news without a doubt yields the greatest effect, other non-finance but major events have their own impact too. They are possibly anticipated or come spontaneously .
Events like the destruction wrought by Hurricane Katrina or 9/11 are unexpected events which may impact the currency exchange market. In such cases all that can be done is damage control by way of building up stop losses.
An example of predicted events would be the holding of a major international conference in a particular country. Its local currency may undergo an increase in currency value due to investor confidence.
Conversely, the countries who were not selected may be affected negatively. Thus advance knowledge of such events are imperative to forex traders.
Daily status and analysis about the financial sector have corresponding effects. Others released irregularly are economic indicators such as GDP, interest rates and inflation.
Currency trading always encompasses two currencies, a fact that you must keep in mind. Trading in your own currency provides you with the luxury of a lot of data but this may be at the expense of ignoring key information about the other currency.
The US is a case in point due to the avalanche of data on the dollar coming through the foreign exchange wire. Trading the greenback to a relatively smaller currency further boost this effect. Committing to memory that fact will guarantee that your market data is always two sided.
Being a novice trader is no excuse for being oblivious of this basic scrutiny of the foreign currency market. Departing the market before major news events is always a shrewd move for the newbie.
A method based on fundamentals may take form as you become savvier in the market. But more than anything else familiarity with the forex fundamentals is paramount . - 23223
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Learn how to understand japanese candlesticks when trading forex. Find out about forex trading software to be fully informed with your forex trading.
posted by X - Men @ 8:18 AM
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