FOREX FUNDAMENTALS: Handling news about foreign exchange
Knowing the ABC's of forex is an essential element to 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 effects wielded by news reports both global and local on the currency market. While finance related news certainly yields the greatest effect, other non-finance but major events have their own impact too. They are possibly anticipated or come unexpectedly .
A tornado or an act of terrorism are cases in point as they are unforeseen but could severely impact the market prices. In such events, stop-losses are just about the only counter-step you would have.
An example of foreseen 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.
In the same breath, the losing competitors could possibly suffer an inverse effect on their currency. Thus knowing the timeline for such events and the entities concerned is crucial .
Daily finance reports that are circulated in quite a number of countries are corresponding circumstances. Data on the nation's economy while infrequent , are pretty much anticipated.
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.
Americans in particular, are predisposed liable to this due to the domination by the US currency as far as foreign exchange intelligence is concerned. This is further boosted when a secondary currency is traded against the dollar. Making sure that your data is always two sided is the proactive step you can make to evade this.
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 an intelligent move for the newbie.
A method based on fundamentals may take form as you become knowledgeable in the market. But more than anything else familiarity with the forex fundamentals is very important . - 23222
There are major effects wielded by news reports both global and local on the currency market. While finance related news certainly yields the greatest effect, other non-finance but major events have their own impact too. They are possibly anticipated or come unexpectedly .
A tornado or an act of terrorism are cases in point as they are unforeseen but could severely impact the market prices. In such events, stop-losses are just about the only counter-step you would have.
An example of foreseen 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.
In the same breath, the losing competitors could possibly suffer an inverse effect on their currency. Thus knowing the timeline for such events and the entities concerned is crucial .
Daily finance reports that are circulated in quite a number of countries are corresponding circumstances. Data on the nation's economy while infrequent , are pretty much anticipated.
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.
Americans in particular, are predisposed liable to this due to the domination by the US currency as far as foreign exchange intelligence is concerned. This is further boosted when a secondary currency is traded against the dollar. Making sure that your data is always two sided is the proactive step you can make to evade this.
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 an intelligent move for the newbie.
A method based on fundamentals may take form as you become knowledgeable in the market. But more than anything else familiarity with the forex fundamentals is very important . - 23222
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Get a good forex introduction. To trade forex effectively you must understand forex trading strategy to keep up with it all.
posted by X - Men @ 7:14 AM
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