What factors affect the forex market?
- Inflation Rates. Changes in market inflation cause changes in currency exchange rates. …
- Interest Rates. …
- Country’s Current Account / Balance of Payments. …
- Government Debt. …
- Terms of Trade. …
- Political Stability & Performance. …
- Recession. …
- Speculation.
What makes a strong currency?
What Makes a Currency Strong or Weak? A currency is classified as strong
when it is worth more than another country’s currency
– in other words, if the American dollar was worth half a pound, the pound would be considerably stronger than the dollar.
What makes a currency weak?
A weak currency refers to
a nation’s money that has seen its value decrease in comparison to other currencies
. Weak currencies are often thought to be those of nations with poor economic fundamentals or systems of governance.
What causes money to lose value?
Inflation is an element that plagues every traditional money
. Since more cash is still continuously being printed, it can decrease its value in a simple case of supply and demand with the worst possible scenario being hyperinflation.
What are the most manipulated forex pairs?
- AUD/JPY (Australian Dollar/Japanese Yen)
- NZD/JPY (New Zealand Dollar/Japanese Yen)
- AUD/USD (Australian Dollar/US Dollar)
- CAD/JPY (Canadian Dollar/Japanese Yen)
- AUD/GBP (Australian Dollar/Pound Sterling)
Yes they can
. They can open the spread on their trading platform and knock traders out of their positions by hitting their stop losses.
Relative Strength Index (RSI)
It is known to be the most commonly used forex indicator and showcases an oversold or overbought condition in the market that is temporary. The RSI value of more than 70 shows an overbought market, while a value lower than 30 shows an oversold market.
Fundamentally, prices move up and down based on
supply and demand
– just like any other financial market. Investors choose to put their money into an economy that has a positive outlook and strong growth potential.
With all the ups and (mostly) downs recently, the
Hungarian forint
has become one of the weakest currencies not only in the region – in Central and Eastern Europe – but in the whole world.
Time value of money exists due to
inflation and preference of people for present consumption
. On account of inflation, you might not be able to buy the same amount of goods in future compared to today as the purchasing power of money decreases due to inflation.
Generally,
higher interest rates
increase the value of a country’s currency. Higher interest rates tend to attract foreign investment, increasing the demand for and value of the home country’s currency.
The forex market runs on the normal business hours of four different parts of the world and their respective time zones. The U.S./London markets overlap (
8 a.m. to noon EST
) has the heaviest volume of trading and is best for trading opportunities.
What is the Easiest Currency Pair to Trade?
EUR/USD
is not just the easiest, but also the most stable currency pair to trade. It is the best choice not only among beginners but also for professional traders. This is one of the most traded currency pairs due to tight spreads and liquidity.
Broker’s License Does Not Guarantee Everything
Many people think that a regulated broker is always good and will never perform forex broker cheats. In reality,
it is not actually true
. Oftentimes, the license is only used by brokers to attract clients registering with the broker.
The answer is:
Yes, stockbrokers can (and do) steal money from their clients
.
Once the supply hits the market, price reverses and starts to fall rapidly while all of the small retail traders that chased the breakout are now getting stopped out to the downside
. This is what we call forex manipulation and it happens on a weekly basis in the FX market.
Key Takeaways.
Macroeconomic statistics, such as inflation
, have the greatest impact on forex markets. Stock, bond, commodity, and other capital markets also have a strong influence on exchange rates. International trade numbers, such as trade deficits and surpluses, play a vital role in forex markets.
- The Scalper.
- The Day Trader.
- The Swing Trader.
- The Position Trader.
