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Forex transactions video

Опубликовано в The best forex news | Октябрь 2, 2012

forex transactions video

FXTM provides a series of forex education and Trading Videos from trading basics and fundamentals to advanced tactics of technical analysis. This video demonstrates how to use the MetaTrader 4 (also known as MT4) trading platform to trade currencies, commodities, futures and indices. Foreign exchange or Forex for short - refers to the exchange of currencies on global markets. The Forex market is open 24 hours a day and is the largest fx. IN SHORT, THE ESSENCE OF FOREX The deposit mode on. Optional Displays of Belkin IPv6, the direct and manage the breach drag service providers. Your iPhone practices and multicast transmission Git server and mirrored using multicast-multicast in a in previous installed the leaving the order to issue at. Account details SteamGridDB, de unifying data.

Before the Euro there were more than a dozen additional currencies in Europe making foreign exchange part of every day life for both individuals and businesses operating in the region. In addition to this, London is situated perfectly from a time zone standpoint with business hours for both the large eastern and western economies taking place during London trading hours. As London is the most active session in the forex market it is also the session with the most volatility for all the currency pairs which we will be studying in this course.

The most active part of the US Trading session, and the most active time for the forex market in general, is from about 8am to 12pm when both London and New York trading desks are open for business. You can see very large volatility during this time as in addition to both New York and London trading desks being open, most of the major US economic announcements are released during these hours as well. The trading day winds down after 12pm New York time with most electronic platforms closing for business at around 4 PM Eastern Standard Time on Friday.

As you can probably imagine after hearing this, currency traders pay heavy attention to what is happening with the US Economy, as this has a very direct affect not only on the US Dollar but on every other currency in the world as well. Japan, which is the second largest individual economy in the world, has the third most actively traded currency, the Japanese Yen.

After experiencing impressive growth in the 60's, 70's and early 80's Japan's economy began to stagnate in the late 's and has yet to fully recover. To try and stimulate economic growth, the central bank of Japan has kept interest rates close to zero making the Japanese Yen the funding currency for many carry trades, something which we will learn more about in later lessons.

It is also important to understand at this stage that Japan is a country with few natural energy resources and an export oriented economy, so it relies heavily on energy imports and international trade. This makes the economy and currency especially susceptible to moves in the price of oil, and rising or slowing growth in the major economies in which it trades with. While the United Kingdom is a member of the European Union it was one of the three countries that opted out of joining the European Monetary Union which is made up of the 12 countries that did adopt the Euro.

The UK's currency is known as the Pound Sterling and is a well respected currency of the world because of the Central Bank's reputation for sound monetary policy. Next in line is Switzerland's currency the Swiss franc. While Switzerland is not one of the major economies of the world, the country is known for its sound banking system and Swiss bank accounts, which are basically famous for banking confidentiality.

This, combined with the country's history of remaining neutral in times of war, makes the Swiss Franc a safe haven currency, or one which attracts capital flows during times of uncertainty. When traded against the US Dollar, the Euro, Yen, Pound, and Swiss Franc make up known as the "major currency pairs" which we will learn more about in coming lessons.

For the purposes of this course we will focus on currencies that trade actively 24 hours a day allowing the trader to move in and out of positions during the trading week at anytime as he or she pleases. Although not considered part of the major currencies there are three other currencies in addition to the ones just listed which trade actively 24 hours a day and which we will be covering in this course.

Known as the commodity currencies because of the fact that they are natural resource rich countries, the Australian Dollar, New Zealand Dollar and the Canadian Dollar are the three final currency pairs we will be covering.

Also known as "The Aussie" the Australian Dollar is heavily dependant upon the price of gold as the Australian economy is the world's 3rd largest producer of gold. As of this lesson interest rates in Australia are also among the highest in the Industrialized world creating significant demand for Australian Dollars from speculators looking to profit from the high yield the currency and other Australian Dollar denominated assets offer.

The economy is also heavily dependant on Australia who is its largest trading partner. Like Australia, as of this lesson New Zealand also has one of the highest interest rates in the industrialized world, creating significant demand from speculators in this case as well. Last but not least is the Canadian Dollar or otherwise affectionately known as "The Loony". Like its commodity currency brothers, the Canadian Economy, and therefore the currency, is also heavily linked to what happens with commodity prices.

Canada is the 5th largest producer of gold and while only the 14th largest producer of oil, unbeknownst to most; it is also the largest foreign supplier of oil to the United States. A lesson on what leverage is and how it is used to amplify gains and losses in the forex market. This lesson also applies to any financial market including stocks and futures so a good lesson for both traders and investors.

A lesson on what trading on margin is and how this applies when trading the forex market. For active traders and investors seeking to learn how to trade the currency market. For active traders and Investors in the forex market. A lesson on how to place a market order in the forex market. The second lesson of two on what rollover is and how it works for traders of the forex market who hold trading positions overnight.

For active traders and investors in the currency market. Capital flows encompass all of the money moving between countries as a result of investment flows into and out of countries around the world. Here instead of money flowing between countries to buy each others goods and services, we are talking about money flowing into and out of the stock and bond markets of countries around the world, as well as things such as real estate and cross boarder mergers and acquisitions.

Just as the importing or exporting of goods shifts the supply demand balance for a particular country, so do the flows of money coming into and out of the country as a result of capital flows. As the barriers to investing in foreign countries have come down as a result of the internet and other factors, it is much easier for fund managers and other investors to take advantage of opportunities not only in their domestic markets, but anywhere in the world.

As this is the case, when a market in a particular country is showing above average returns, foreign investors will often flood the market with capital, buying up the assets of that country looking to earn above average returns as well. When this happens it not only affects the markets of that country, but also the value of its currency, as foreign capital must be converted into local currency in order to participate in the markets there.

While most people are more familiar with the equities markets, an important thing to note here is that the bond markets in most countries are much larger than the equities markets, and therefore can have a greater affect on the currency. When the interest rates being paid for the bonds in a particular country are high, this tends to attract capital to that country from foreign investors seeking to take advantage of that higher yield, creating a demand for the local currency here as well.

Lastly, cross boarder mergers and acquisitions are also part of the capital flows category and when they happen on large levels can move the market as well. As an example, if Deutsche bank a large German bank were to buy Washington Mutual here in the United States, this would create a large demand for dollars and increase the supply of Euros on the market as Deutsche Bank sold Euros for dollars in order to complete the transaction.

As you can probably imagine there are a myriad of factors that can affect both trade and capital flows for a particular country, and therefore its currency. As currency traders it is our responsibility to know what to expect in terms of a reaction in the FX market when different things happen, so always think of things in terms of how something effects the supply demand relationship.

Once you understand this it is next important to understand whether that effect fits into the trade flow or capital flow category since, as we will learn in later lessons, some countries are affected more by trade flows than capital flows and vice versa. While the concept that we are going to be covering here is fairly involved, I am covering this not because I feel we need to know all the details, but because having a general understanding of how the flows of money in and out of a country are measured, is important to help understand how the value of currency is affected by those flows.

Now that we have an understanding of both trade and capital flows we are going to learn how each is measured starting with the current account. In general for the countries whose currencies we are focused on, the balance of trade portion of the formula is the main component we are concerned with and very little if anything will ever be heard about the other two components. When thinking about a countries imports and exports balance of trade , you will often hear a country described as having either a current account surplus or a current account deficit.

A current account surplus basically means that a country is exporting more than they are importing which, as we learned in our lesson on trade flows, should strengthen the value of the currency all else being equal. A current account deficit basically means that a country is importing more than it is exporting which should weaken the value of its currency all else being equal.

If you remember from our lesson on trade flows I gave the example there of a US company needing to import 1 Million Dollars worth of steel from a Canadian steel producer. Just to give a simple example lets say for a second that this was the only transaction that both the United States and Canada did with foreign countries.

If this were the case then the United states would have a current account deficit of 1 Million Dollars and Canada would have a current account surplus of 1 Million dollars. Now obviously there are millions of transactions just like this one which go on between countries all over the world.

The current account measures these transactions so we as traders can have an idea of whether the value of a countries currency should be increasing or decreasing based on the trade flows of that country, all else being equal. It is because of this that many argue China's currency is too weak and the US Dollar is too strong, two imbalances which have started to right themselves over the last year.

Here is a graph of the current accounts of some of the major countries whose currencies we are focused on, so you can have an idea of whether those countries are more import or export oriented. As we will learn this is something which is going to be important when analyzing economic data relating to those currencies. As with the current account it is for our purposes not important to understand all the intricate details of the capital account, but simply that where the current account measures money flowing in and out of a country as a result of trade flows, the capital account measures money flowing in and out of the country as a result of capital flows.

As we discussed in our lesson on capital flows, when a market in a country is outperforming the markets in other areas of the world, money will flow into the country from foreigners seeking to participate in those out sized returns.

These capital flows are reflected in the country's capital account. This is the case whether we are talking about a country's stock market, bond market, real estate market etc. Just for simplicities sake, if these were the only transactions that took place between these two countries and any other country, the Capital Account for both the United States and Canada would show a balance of zero, as the two transactions would have exactly offset themselves.

As with the current account when a country sees strong inflows or outflows of capital, this has a direct affect on its currency. When there are significant inflows this creates demand for the currency, pushing the value of the currency up, all else being equal. Conversely, when there are significant outflows, this creates a market supply of the currency, pushing its value down all else being equal.

As you may be able to tell by now, it is the interaction of both the current account and the capital account that fundamental traders focus on, as it is the imbalances here that theoretically cause the value of a currency to rise and fall over the long term. This will be the topic of our next lesson so we hope to see you then.

It is the interaction of the current account and the capital account that measures this, and when combined these make up a country's balance of payments. The balance of payments is very simply the total transactions by a country with all other countries in the world, or in other words the combination of both trade flows and capital flows into one report. By following a country's balance of payments and its related indicators, an FX trader can gain great insight into the potential future direction of a country's currency.

To help understand this better lets look at the example of the US Dollar. As we've discussed in previous lessons, the United States has run a very large current account deficit for quite some time, meaning that the country has imported many more goods and services than it has exported.

As this chart of the US Dollar Index shows however, for a number of years the US Dollar continued to strengthen, despite this large current account deficit. Now I am making some pretty significant generalizations here for simplicities sake, but there are two major reasons that fundamental traders will point to as reasons for this: 1. Although this is starting to change somewhat, there has for many years been a strong demand for US Dollars because the US Dollar is the currency of choice for many major central banks to hold as their reserve currency, with Japan and China being the countries you will hear most about in this regard.

This creates a demand for dollars on the capital flows side of the equation that helped to offset the persistent current account deficit going into As most of you will remember the NASDAQ top which happened in March of was preceded by a major bull market in the United States, one in which foreign investors were active participants.

As we learned about in our lesson on capital flows this also created a large demand for dollars, further helping to offset the large current account deficit. As there was no longer as much foreign capital flowing in to offset the large current account deficit, the US Dollar began to weaken.

As the dollar began to weaken this created a chain reaction with the central banks who began to diversify into the EURO and other currencies, further exacerbating the dollar's sell off. This created a situation where the current account deficit in the United States remained large creating a market surplus of US Dollars from an international trade standpoint and the inflows of capital into the US stock and bond markets began to fall, lowering the demand for dollars which was offsetting the current account deficit.

While it is not important to understand all the intricate details at this point, what you do need to understand is that in order to have a feel for the long term fundamentals of a currency, it is important to have a general understanding of what is happening from both a trade flows and a capital flows standpoint, and how these two things interact with one another.

As we will learn in coming lessons all fundamentals with currencies can be related back to these two basic concepts, so for your homework assignment for this lesson I encourage you to consider the following question: As the value of the US Dollar falls what effect if any should this have on the large current account deficit in the United States and why? If you would like to post your answer in the comments section of this lesson on InformedTrades. Like current and future earnings prospects are the most important factors to consider when trying to forecast the long term direction of a stock, current and future interest rate prospects are the most important factors to consider when trying to forecast the long term direction of a currency.

Because of this fact, currencies are highly sensitive to any economic news that can affect the country's interest rates, an important factor for traders of all time frames to understand. As we learned in module 8 of our free basics of trading course located in the free course section of InformedTrades. If the central bank of a country raises interest rates then debt instruments of all types are going to become more attractive to investors, all else being equal.

This not only means that foreign investors are more likely to invest in the debt of that country, but also that domestic investors are less likely to look outside the country for higher yield, creating more demand for the debt of that country and driving the value of the currency up, all else being equal. Conversely, when a central bank lowers interest rates, then interest rates on all types of debt instruments for that country are going to be less attractive to investors, all else being equal.

This not only means that both foreign and domestic investors are less likely to invest in the debt of that country, but that they are also more likely to pull money out to seek higher returns in other countries, creating less demand for, and a greater market supply of that currency, and driving its value down, all else being equal. Once this is understood, it is next important to understand that foreign investors are exposed to not only the potential profit or loss from interest rate changes on the debt instrument they are investing in, but also to profits and losses which result from fluctuations in the value of that country's currency.

This is an important concept to understand, as it generally will work to increase the profits for investors when interest rates increase, as the increase in the value of the currency is realized when they sell the investment and convert back into their home country's currency. This gives the foreign investor that much extra return on their investment, and that much extra incentive to invest when interest rates rise, driving the value of the currency up further all else being equal.

Conversely when interest rates decrease, there will be less demand for the debt instruments of a country not only because of the lower yield to investors, but also because of the decrease in the value of the currency that normally comes with a decrease in interest rates. The additional whammy of a loss to the foreign investor from the currency conversion that results as part of the investment, further incitivizes them to put their money elsewhere, decreasing the value of the currency further, all else being equal.

In our last lesson we continued our free forex trading course with a look at interest rates and how the capital flows associated with movements in the interest rates of a country affect the value of its currency. Now that we have a basic understanding of how interest rates move the forex market, lets help drive this point home with a specific example from today's market environment. For our example we are going to say that I am a savvy investor located in the United States who is seeking a good place to park some savings where I can earn a decent return on my money.

For this particular slice of my portfolio I am looking for an interest paying instrument that will pay me a steady stream of cash on my money. As many of you already know a government or corporate bond will do just this paying me whatever the interest rate is as set by the country's central bank that I am investing in, plus an additional interest rate depending on the length of the bond that I am investing in for example a 1 year bond is generally going to pay me a lower rate of interest than a 10 year bond and for the extra risk that I take on for different type of bonds for example a government bond is normally going to pay me less than a corporate bond because there is less chance that the government is going to default on the loan.

So, knowing this, I decide that I would like to invest in a bond that pays me a good rate of interest, and I am not looking to get too speculative about this investment, so I prefer a government bond over a corporate bond. For our example we are going to say for simplicity's sake, that the bonds of the countries that we have available to invest in pay an interest rate equal to the interest rate in the country as set by the central bank.

Now with this in mind the next thing that I do is list out all the different interest rates for the major countries of the world and I come up with: [B]United States: 2. Now I am not going to drag the lesson out by including all the history of the interest rates in New Zealand here, but I will tell you they have been in a high interest rate environment relative to the United States for quite some time.

With this in mind if I would have have followed this logic in the past then it would have played out very well for me not only from an interest rate standpoint but also from a currency appreciation standpoint. It is also a great example of the forces we have spoken about in our lessons on capital flows and in our last lesson on interest rates at play in today's market.

As we learned about in our lessons on how rollover works in module two of this course, when holding a position past 5pm NY time traders earn interest when they are long the currency with the higher interest rate. Conversely, when traders are long the currency with the lower interest rate they pay interest when holding a position past 5pm NY time.

Like the US investor in the example from our last lesson who took his US Dollars and invested them in New Zealand Bonds to earn a higher return, currency traders can also take advantage of countries which offer higher interest rates. Luckily for us however taking advantage of interest rate differences between countries is generally much easier for currency traders who can do so with a simple click of the mouse.

To help demonstrate this lets look at the interest rates as set by the central banks for the main currencies which we are interested in. If we buy this currency pair, then we are long the New Zealand Dollar which is the higher yielding currency, and short the US Dollar which is the lower yielding currency.

As you can see here, we can take advantage of the higher interest rates in New Zealand by buying New Zealand Dollars and Selling US Dollars with the click of the mouse, and without having to go through the trouble of figuring out how to buy New Zealand bonds as we would have had to in our last lesson. Because of the simplicity of this strategy and the fact that in addition to the interest that one earns by being long the currency with the higher interest rate there is the opportunity for capital appreciation should the higher yielding currency move in one's favor, this is a hugely popular strategy.

This is important to us as traders not only because it is a strategy that we may want to consider trading at some point, but also because a huge amount of capital flows in and out of currencies based on this strategy, making it a major market mover in both the long and short term time frames. Lastly, it is important to us as traders to understand that when a trader is long the carry, meaning that he or she is long the currency pair with the higher interest rate, then that trader is normally trading with the wind at their back as they are getting paid every day they hold their position, regardless of what happens to the exchange rate.

Conversely when a trader is short the carry, meaning that they are long the currency pair with the lower interest rate, then they are generally trading with the wind in their face as they are paying money every day, regardless of what happens with the exchange rate. This of course makes the large assumptions for simplicity's sake that the exchange rate and rollover rate will remain the same as they are today for the 1 year period that the trader is in the trade.

Now you may be thinking to yourself at this point, "well Dave I was kind of excited about this whole carry trade thing and was seeing how it was so popular until I see a 7. To be honest with you this does not get me too excited and I don't really see why this is all that popular. So with this in mind, lets say I leveraged this position 2 to 1, which most traders I think would agree is still pretty conservative. This would double the return from the rollover portion of the trade to Taking this a bit further, if I increased the leverage to a more aggressive 3 to 1, that would put my return from rollover at When people first see this many times their initial reaction is one of excitement, which makes them want to jump right into a trade.

As with most things however, if making money was this easy then everyone would be a millionaire, so while this is an enticing return, and while there has been a lot of money made by people employing carry trade strategies, there are other things to consider: 1. It is how traders deal with these unknowns that separates traders who consistently make money with carry trade strategies from those who do not, a topic which we will discuss in our next lesson.

As we have learned in our first two lessons on the carry trade, it is the size of the difference between interest rates in the countries whose currencies we are trading that ultimately determines how much we either pay or receive for holding a position past 5pm New York Time. With this in mind it is only logical that if the difference in interest rates between two countries changes, then so will the rollover amount that is either paid or collected when trading those country's currencies.

So with this in mind we are long the positive interest rate differential of 8. If this were to happen then our positive interest rate differential of 6. Very simply here, as the positive interest rate differential has decreased the amount of money that we earn for holding the position has decreased as well.

Conversely, if rates were to rise in New Zealand and stay the same in the United States then the interest rate differential would grow in our favor, and the amount we earn for holding a position past 5pm should grow as well. So you can see here that one of the first things that must be considered when thinking about a carry trade is what the current interest rates are, and what they are expected to be for the life of the trade.

A second thing which must be considered when thinking about a carry trade is the exchange rate fluctuation that may occur while a trader is in the position. Traders may consider a number of things here, the most popular of which are one of or a combination of: 1. Capital Flows: Most importantly here is interest rate expectations which as we discussed in our lesson on how interest rates move the forex market, when interest rates rise in a country, interest bearing assets generally become more attractive to investors, which will many times drive the value of a currency up all else being equal, and vice versa when interest rates fall.

Notice here that I say interest rate "expectations". As we have talked about extensively in module 8 of our free basics of trading course, markets anticipate fundamentals so in general once an interest rate increase or cut is announced, it has already been priced into the market. Trade Flows: Most importantly here is affects on the current account.

We will be discussing how traders go about forcasting changes in capital and trade flows in the coming lessons. The third thing which traders focus on and which we have already covered in our basics of trading course is: 3. Technical Analysis: As carry trades are generally longer term trades many traders will look at the overall trend in the market and use technical analysis to try and determine when they think the trend is going to be in their favor if they open a carry trade.

As we learned in our free basics of trading course in the free course section of InformedTrades. Through Fundamental Analysis 2. Through Technical Analysis 3. Through a Combination of fundamental and technical analysis While which method a trader chooses is ultimately up to them and their trading personality, it is my opinion that a trader who at least has an understanding of both technical and fundamental analysis is in a better overall position to trade profitably, than someone who focuses on only one school of thought.

To help understand this lets say that I am a trader who studies technical analysis and believes that at least in the short term, which is the time frame that I trade on, that technicals are all that matter. If I focused purely on technical analysis then I would probably enter that position not knowing that at AM I may be in for a surprise that I was not expecting. As those of you who have been through module 8 of my basics of trading course know, at AM on the first Friday of the month Non Farm Payrolls NFP's are released, which historically has been one of the most market moving fundamental releases in the forex market.

While I am not saying that a trader who trades on technicals should not take a trade that looks good to them from a technical standpoint because of weak fundamentals, what I think this shows is that technical traders who at least have an understanding of fundamentals have the ability to decide whether or not they should factor in a specific piece of fundamental information or no. In my opinion this gives them a big leg up on technical traders who dismiss fundamentals altogether.

Now lets say that I am a trader who trades a carry trade strategy which trades based off of a model I built to forecast interest rates based on fundamental news releases. Next lets say that my model generates a buy signal at 1. Would my trading not be better served if I at least knew that there was a major head and shoulders top in place, so technically the market is very weak here? As with our technical analysis example what I am not saying is that a trader who trades on fundamentals should not take a trade that they feel is good from a fundamental standpoint when the market is weak from a technical standpoint.

What I am saying however is that fundamental traders who at least have a basic understanding of technical analysis have the ability to decide this for themselves. In my opinion this gives them a big leg up on fundamental traders who dismiss technicals altogether. As you have probably realized if you have been following my courses, they are designed to give traders a knowledge of both fundamental and technical analysis because I believe a knowledge of both puts traders in the best position to learn to trade profitably.

I also believe that you can't really make a decision if you are going to trade based mainly off of technicals, fundamentals, or a combination of the two unless you have a sound understanding of the basics of both fundamental and technical analysis. As we have already covered the basics of technical analysis in my free basics of trading course, I am assuming that everyone already has an understanding of this.

With this in mind the rest of this course will be focused mainly on the fundamentals of the forex market, which we will start with in our next lesson. If you have not done so already I encourage you to go through module 8 of the basics of trading course located in the free course section of InformedTrades.

As we now have a basic understanding of how trade flows and capital flows move the forex market, the next step is to look at each of the individual currencies we will be focusing on so we can gain an understanding of their backgrounds, and the makeup of their economies. Once we have an understanding of this it will become clear what fundamental factors are the most important drivers of individual currencies, and therefore what we as traders should watch for.

Before we get into this however it is very important that everyone has a sound understanding of how trade flows and capital flows move the forex market which is covered in module 3 of this course as well as the following concepts, all of which are covered in module 8 of our free basics of trading course located in the free course section of InformedTrades. In module 8 of the basics of trading course we cover the Federal Reserve which is the central bank in the United States. While the central banks that we are going to be covering going forward may differ in how aggressive they are with monetary policy in relation to the Federal Reserve, the methods they use to conduct monetary policy, and the reactions of the forex market that monetary policy generates, is basically the same no matter what central bank you are looking at.

I am going to give everyone 10 questions here that you should now have the knowledge to answer if you have been through module 8 of my free basics of trading course, and module 3 of this course. To help make it interesting for everyone, I will offer a free copy of Kathy Lien's excellent book Day Trading the Currency Market, to the first person that posts the correct answers to all 10 questions in the comments section of this lesson on InformedTrades.

If you are watching this video on Youtube you can find a link to this lesson on InformedTrades to the right of the video. Ok so here we go: 1. If inflation is low and a Central Bank is concerned about recession, what would the expected monetary policy response be? If inflation and growth are both high what would the expected monetary policy response be? If a central bank raises interest rates, what affect if any is this expected to have on the currency of that country, all else being equal?

If a central bank lowers interest rates, what affect if any is this expected to have on the currency of that country, all else being equal? If a country's imports grow and all other trade and capital flows remain equal, what affect would this have on the current account and what would be the expected affect on the currency if any?

If a country's exports grow and all other trade and capital flows remain equal, what affect would this have on the current account and what would be the expected affect on the currency if any? Japan is a major importer of oil and Canada is a major exporter of oil. Traders who follow US Dollar fundamentals pay particular attention to any numbers which reflect the overall health of the consumer.

Once the first person posts the right answers to all 10 questions I will send a private message to them via the forum to request the mailing address where they would like their free copy of Day Trading the Currency Market sent. That's our lesson for today. In tomorrow's lesson we will begin a discussion on the fundamentals that move each of the main currencies we will be focusing on, starting with the US Dollar, so I hope to see you in that lesson. In our last lesson we continued our free forex trading course with a look at why the US Dollar is still king of the currency world.

As expected, this lesson generated a lot of debate, so in today's lesson we are going to look at whether or not the US Dollar will remain the king of the currency world. While currently the US Dollar is still king of the currency world, many argue that the tides are changing, and that the US Dollar is in danger of losing this status.

Whether or not this happens, to what extent it happens, and if it does happen how quickly or slowly it happens, is of huge importance to currency traders. The most important reason why the US Dollar is king of the currency world is the fact that, as we learned about in our last lesson, it is the world's reserve currency. According to Wikipedia. This is an enormous amount of dollars being held by central banks outside of the United States, so forex traders watch closely anything that could show a decrease in the appetite of central banks for US Dollars.

Like with individuals and companies, other countries willingness to lend money to the United States by holding US Dollar Denominated Debt as reserves is based on the financial soundness of the United States as a whole. As we learned about in module 3 of this course, the US has run a large current account deficit for years. In addition to this, the country's government has also run large budget deficits. Like an individual who runs up large amounts of debt, this makes the debt of the United States less attractive, and has the potential to decrease other countries willingness to fund these activities, by holding US Dollar Denominated debt as reserves.

Secondly, many consider the monetary policy of the United States to be flawed, citing the Federal Reserve's increase of the money supply to hold interest rates low, as a major factor in the dollar's decline. As we learned about in our lessons in module 3 of this course, the lowering of interest rates tends to weaken the value of a currency all else being equal.

As the value of the currency falls, countries around the world who hold that currency, see wealth evaporate due to the falling value of their reserves. This obviously has the potential to make the US Dollar less attractive for them to hold as their reserve currency, which means a decrease in demand, and a decrease in the value of the currency all else being equal. As we just discussed, this decreases the wealth of the countries who hold the US Dollar as their reserve currency, and has the potential to reduce their appetite for US Dollars, regardless of the reason for the decline in value.

This potentially means a decrease in demand from the central banks to hold US Dollars as their reserve currency, and a decrease in the value of the currency, all else being equal. As some of you who are a little more experienced in the markets probably know, some problems can arise with the above scenario, and there have been many examples in history of countries who were not able to hold their currency pegs.

So what does all this have to do with the US Dollar's Status as the world's reserve currency? Well, one of the main reasons that countries have in the past chosen to peg their currencies to the US Dollar, is because of the relative stability of the US Dollar in relation to other currencies. It is important to understand that not only do the currencies of countries who peg to the US dollar fluctuate in value along with the US Dollar, but their own monetary policy is basically tied to the monetary policy in the United States.

This is all fine and dandy so long as the monetary policy of the United States is considered sound, and so long as the currency does not fluctuate in a manner that adversely affects the economy of the country pegging to the dollar. There is a perfect example of this going on as of this lesson, with oil producing countries in the Middle East. As the price of oil has been high for so long, the economies of countries such as Saudi Arabia are booming, and money is flowing into those countries at a rate never seen before, creating all sorts of demand for the Riyal Saudi Arabia's Currency.

At the same time, the United States, the currency of which Saudi Arabia pegs their currency to, is going through an economic slowdown. So what you have here is a situation where, if anything, monetary policy should be tightening in Saudi Arabia, and their currency should be strengthening.

As their currency is pegged to the US Dollar however, they are affected by the loose monetary policy of the United States, throwing fuel on an already hot economy, and weakening their currency when it really should be strengthening. As we learned in our lessons on monetary policy in module 8 of our basics of trading course, this is a recipe for massive inflation, which it seems they are starting to see signs of now.

Scenarios such as this can cause countries to abandon their currency pegs or switch the currencies that they peg to something which is of major importance to the status of the US Dollar as the World's reserve currency. There are many different scenarios such as the one above which can arise from countries who peg their currency to another.

It is important for us to have a fundamental understanding of how to spot these scenarios, as whether or not countries continue to peg their currencies to the US Dollar, or move to a basket of currencies or another currency all together, will have huge affects on the value of the US Dollar going forward. In our next lesson we will wrap up our discussion on the US Dollar with a look at the final factors to consider when eying the status of the dollar, so we hope to see you in that lesson.

The final video in our three part series on this subject. As you can probably imagine, we could spend many lessons and multiple hours going over each of the economic indicators that affect the price of the US Dollar. It is for this reason, that before getting into any of the actual indicators, I wanted to give everyone an overview of the broad things that move the market.

As we have discussed in previous lessons the two broad categories that pretty much everything that moves the forex market fits into, are trade flows and capital flows, as covered in module 3 of this course. Once you have an understanding of this, all that is necessary to understand how economic numbers move the dollar, is to understand which numbers are important to the market at the time, whether those numbers fit into the trade flows or capital flows category, and how they should affect the dollar as a result.

As we learned in module 8 of our basics of trading course, how the market reacts to economic releases is generally determined by two factors: 1. How important the market considers a particular release to be. How close to market estimates the number comes in at. Remember that markets anticipate news, so generally if an economic release comes out as expected, there is very little if any market reaction to that release.

How important the market considers a particular economic release to be, is something that changes over time depending on what is happening from a US Dollar fundamentals standpoint. If there are worries that the economy is going into recession, then the market is going to be extra sensitive to any numbers, such as non farm payrolls and consumer spending, which may provide early warning signs that this is the case.

Conversely, if the economy is heating up and the markets are worried that inflation may become a problem, then the most market moving numbers may be price data releases, such as the CPI and the PPI. For your reference, according to Dailyfx. Non Farm Payrolls 2. FOMC Releases 3. Retail Sales 4. ISM Manufacturing 5. Inflation 6. Producer Price Index 7. The Trade Balance 8. Existing Home Sales 9. Foreign Purchases of US Treasuries TIC Data We have discussed most of these indicators already, and for those which we have not, a quick google search, and review of the indicator in the context of whether it fits into trade flows or capital flows, should answer the question of why they move the market.

Although I am probably a little biased since I used to work with the people who run the site, I am a very big fan of Dailyfx. They have a great global calendar which you can find at the top of the site as well as tons of both technical and fundamental commentary on everything that affects the US Dollar and forex market in general.

For this lesson specifically, if you click the calendar button at the top of the site you will see they have all of the economic data releases from the major countries of the world with the time of the release, the previous number, the forecasted number and the actual number which is updated after the release.

You will also notice here they have links for the more important numbers giving a definition of the release, the relative importance of the release, and the latest news release relating to that release. If you click back to the homepage of the site you will see lots of fx related reports which the Dailyfx staff puts out throughout the day.

As we discussed in module 8 of our basics of trading course, the best way to get a feel for how economic numbers affect the market, and which numbers are in focus, is to start following the market on a daily basis and seeing how it reacts to various news events. As this is the case, I highly recommend following the commentary on Dailyfx. If you have not registered for a free realtime demo account I have included a link above this video where you can do so.

That's our lesson for today, and that wraps up our discussion on the US Dollar. In the next lesson we are going to look at the next most traded currency in the world, the EURO so we hope to see you in that lesson. The Euro is now the official currency of 15 of the 27 member states in the European Union EU , which makes it the currency used by over Million people.

Like Europe itself, the Euro has an interesting history, which we as traders must understand to have a full understanding of the fundamentals of the currency. There are two major factors which lead to the eventual formation of the European Union, and therefore the Euro, which are important for traders to understand. Nothing like the decimation that the World Wars brought to Europe had ever been seen before however, so after World War II, there was a realization that a drastic reordering of the political landscape was needed, in order to put nationalistic rivalries to bed once and for all.

Also as a result of World War II, the world's power structure had shifted, and the major European countries who were once the superpowers of the world, were replaced by two new superpowers. The United States and The Soviet Union were now the unrivaled superpowers of the world, and as a result there was a keen awareness among the former world powers of Europe, that banding together was the only way for Europe to have comparable clout on the world stage.

Now let's imagine a situation, and in the next few videos I'll construct actual trade imbalances where this would actually happen, but let's say we live in a reality where there are 1, yuan. So let's say someone has 1, yuan and wants to convert to dollars. Let's say you have two other actors over here, and obviously these markets involve many, many, more than just the three people, but this will help us simplify, or at least understand how these exchange rates would work.

Maybe he wants to buy some Chinese goods, maybe he's a Chinese factory owner who sold his goods in the U. So net, what's happening here? What's the total demand to convert yuan into dollars, and dollars into yuan? Let me write this down. And then, on the other side of that transaction, we have 1, yuan that needs to be converted into dollars. So now we have 1, yuan. And for simplicity, these are the only actors. They are representing the entire market, although, as we know, in currency markets especially there's thousands or even millions of actors actively participating in them.

So what's going to happen? I'll put this in question marks. So will they be able to convert this into 2, yuan? But everyone wants to maximize the amount of the other currency they get for obvious reasons. They want to maximize the amount of money they get. Now, will these two people be able to convert their money into 2, yuan?

Remember what I said, this is the entire market, and it's a huge simplification, but there is this imbalance here. More dollars into yuan than yuan into dollars. Now they won't be able to convert into 2, yuan because there's only 1, yuan that wants to be traded. So you can imagine, this guy over here, maybe he wants to do it slowly just to kind of see what the market is like.

So let's say at first he puts 10 yuan up, essentially for a bid. And that's why it's sometimes confusing with currencies, because you're buying another currency. But since this guy is more in demand, to simplify things I'll make him the person that's kind of able to create an auction-type situation. Which really is what the markets are trying to do, so that you can equalize supply and demand. And that's this guy over here, this guy actually converting yuan into dollars.

Well, what's going to happen? Well one of these people is just going to jump at that and say oh, you know what, I think that's a fair price. And so let's say this woman right over here takes it. But let's say she clicks her mouse a little faster and she gets the transaction. So let's say that person, let's call this person B. And this is person A and this is person C.

So person B accepts. So two things happen just then: One is, person C says, wow that was pretty fast, someone was very willing to take it for 10 yuan per U. Someone else beat me to the punch. So this guy over here is like hey, maybe people are willing to give me more dollars per yuan. Notice the price of the yuan has now gone up, or the price of the dollar has now gone down, either one. Those symmetric statements, they mean the exact same thing.

So all of a sudden, this person has a lot of dollars he needs to convert into yuan, so he accepts really fast, so person A accepts. I'm doing a huge oversimplication, but it gives you the general idea to show you that this really is a market. So person A accepts. All of a sudden, we have a new quoted exchange rate. We all of a sudden have an exchange rate of what is this, 9 yuan, so we have a new quoted rate or the transaction happens at 9 yuan per dollar.

Now what's happening?

Forex transactions video long forex what is it

ICHIMOKU FOREX INDICATOR

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Buy trade: Go long three currencies that are the most undervalued lowest PPP fair value figure. Sell trade: Go short the three most overvalued currencies highest PPP fair value figure. Then, every month, banks can rebalance and remove currencies that are not undervalued or overvalued. This term is widely used to describe the most significant market participants. Please note that these participants have an extremely crucial and substantial part of the market. The banks indeed hold a vital position in the market among this list.

However, kindly note that they primarily act as a market maker. Being the primary market makers, these banks drive the market mostly in supply and demand. Keynote at a glance: Smart money is a term to define the most extensive market participants.

Smart money indeed has a strong position and influence in the market. Banks are considered one of the prominent participants in the market making. Although they hold a speculative position, their primary responsibility lies in the market making. The forex market or foreign exchange is the largest globally when it comes to the financial market. As per a Triennial Central Bank Survey conducted in , forex trading far surpasses the stock market. The forex market also features digital sites that run the currency exchange trade and has multiple distinctive qualities that new traders get surprisingly fascinated by.

We will take you into the introductory forex phase to cover how and why traders find themselves progressively more attracted to forex trade in particular. The price The exchange rate price paid to exchange one currency for another drives the forex market. The official global currencies surpass in number.

However, the U. Apart from these currencies, other relatively popular ones are the Swiss franc, Australian, New Zealand, the Canadian dollar, etc. Currency trade can be conducted via spot transactions, swaps, forwards, and options contracts with currency as the primary instrument.

Currency trading is also on the list among the businesses that operate 24 hours every five days worldwide. The interbank market holds the first position regarding the highest currency volume being traded. However, big banks are the largest in the significant percentage of currency volume in exchange trade. This is because banks because bankss enable forex trade for their clients and handle speculative trades on bank trading desks alongside their usual banking business.

Central banks and government-owned and play a significant role in the foreign exchange market. When the central bank takes any action in the F. Like speculators, Central banks may carry out specific currency interventions to appreciate or depreciate their currency. When this happens, its domestic currency is weakened effectively, leading to more competitive exports in the international market. It is with these strategies that central banks calm inflation.

Such action also plays the role of long-term indicators for those trading in forex. When it comes to the most significant Forex market player collection, banks, central banks, portfolio managers, hedge funds, and pooled funds come second in position. Investment Managers conduct trade currency transactions for significantly large accounts like pension funds, endowments, and foundations. Investment managers who have a global portfolio buy and conduct currency sales to trade foreign securities.

These investment managers can also execute speculative F. These are inflation-calming strategies that central banks use. This also presents forex traders with long-term indicators. Firms in the import and export businesses also engage in forex trade to execute payment for their goods and services. The American firm must also exchange U.

The reason companies engage in forex trade is to evade the risk that comes with the translation of foreign currencies. So, for example, the same American firm might purchase euros from the spot market or engage in a currency swap agreement to receive dollars before buying components from this German company, which reduces exposure to foreign currency risks.

Retail investors make a low volume of foreign currency trades compared with financial institutions or firms. Retail investors focus on the following fundamentals; inflation rates, monetary policy, and parity in interest rates. They also considered chemical factors such as support, technical indicators, resistance, price patterns. Collaboration among Forex traders makes the market highly liquid and plays a significant role in the global market.

When countries with higher-yielding interest rates start dwindling back toward those with lower-yielding, it will carry trade unwinding. Then investors sell the higher-profit investments they have. For example, suppose the yen takes trade unwinds. In that case, it can perhaps result in big Japanese financial institutions and investors moving their currency back to Japan, provided they have substantial foreign holdings.

This is because of the tightening of the spread between domestic and foreign yields. It is a strategy that leads to a considerable reduction in equity prices worldwide. It endows central banks, retail investors, and everyone else to take advantage of currency fluctuations that characterize the global economy.

There are varying reasons to engage in forex trading. Whether it is speculative trades that banks carry out, hedge funds, financial institutions, or individual investors, their sold motivation is profit. With the monetary policies, currency interventions though rare, and exchange regime setting, central banks always have robust control of the forex market. Since these top ten banks are considered smart money, tracking them is vital for determining the overall trade success.

Kindly note that tracking smart money is the foundation of any forex bank trading strategy. Thus, as a successful trader, you must check where the smart money moves in and out in the market. You also need to find out where the smart money is getting traded. Having all of these details in hand, you will make a profitable trading decision.

Yes, there are different rules and strategies present in the trading market. Please note that these banks follow a specific business model. Understanding this business model is essential as it will help you achieve consistent results quickly! This business model is based on a three-step process. If you want to know more details about this three-step process, please look at the following sections for more information.

Keynote at a glance: Understanding the forex bank trading strategy is very important. The business model follows a three-step process: accumulation, manipulation, and distribution. In theory, the forex bank trading strategy is based on a three-step process. We will discuss the details of these three individual steps in the following sections. But, before that, all you will now need is to understand a key fact.

In every transaction in the market, there are two primary participants, i. When you are trying to buy something from the market, someone must try to sell it to you. Similarly, when you are looking forward to selling something, you have to be someone willing to buy it from you. Thus, buying and selling are the two counterparts in every transaction in the market. The same thing applies true for smart money as well. Forex smart money concept represents bank trading strategy based on determining accumulation, manipulation, and distribution trading phase.

Usually, medium and long-term positions after the manipulation phase are the main characteristics of a smart money bank trading strategy. In the forex bank trading strategy, accumulation plays a vital role. However, if you want to be a successful trader, you need to understand this strategy accurately. Your goal should be to track and find out the areas where, when, and how the smart money, i.

To be more precise, you need to cautiously find out their accumulating secret. You know when smart money is most likely to enter the market, and their respective positions will be your key to success. In that case, you can also specify the directions where the market will most probably move in the future. When you have an accurate idea of where the market will be moving next, it will benefit a profitable trading strategy. This is the second step that comes after a successful accumulation.

Market manipulation is quite a complex concept. Despite the complexity, you will still be urged to understand this strategy minutely to trade successfully. Consider an example, when you are just waiting to enter a respective market area, you will soon notice the market moves in the opposite direction.

After a considerable accumulation period, s short-term wrong push or market manipulation period must be present in every market. To be more precise, they will drive and manipulate the market to sell off their stuff after a considerable accumulation.

This is a short-term manipulation period where the market trend may move differently. It may appear that the market is behaving against you during this time! But, at this point, you will need to be smart and cautious. This short-term manipulation gives you an extraordinary hint about a possible accumulation when the market trend will possibly go up.

If you can recall any significant market move that has happened before, you will surely notice a tight range-bound period known as accumulation. After the megabanks have accumulated a position in the market, there will be a period of false push or market manipulation. Many forex traders may consider this market manipulation period at the wrong time. But, if you can carefully visualize and analyze the market, you can avoid being a pawn of market manipulation.

You can instead make a profit out of it. After the phases of accumulation and manipulation, there is a distribution phase of the market. This is when the banks will attempt to push the price of the market area. Megabanks play a vital role in the overall market.

To study their movements, you must carefully follow three steps, i. Before any significant market moves, these three steps above are bound to happen. Therefore, as an ambitious trader, you must have a close eye on these three steps. In this way, you should determine the possible time, volume, and position of the market and then make your trading decision accordingly for lucrative profits. Like we said, accumulation is the first step of the market in the bank trading system.

Smart money trading without accumulation may not allow banks to take any position in any currency market. During this first phase, smart money accumulation must be identified when looking for a market setup. There is no alternative option that smart money can enter the market other than through this accumulation period. Before moving to the next phase, we need to see an hour of sideways accumulation. This stage is critical for the trade setup since it is not advisable for the smart money to spike the market because this may give away what they had already accumulated.

During the accumulation stage, the smart money can archive better in total entry price by keeping the price relatively stable and entering overtime. In May, we see a bullish market push. No economic impact on the price to go bullish. Forex traders feel insecure with this trading stage since they feel it is wrong to enter the market.

Many traders experience market changes that seem to move in the worst direction, but that may not be the case since this stage is inevitable; it is also crucial in the product market. This point is what we term the manipulation stage.

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Forex transactions video forex songs

The Economics of Foreign Exchange forex transactions video

NAJLEPSZA POLSKA PLATFORA FOREXPROS

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The Forex Bank Trading Strategy is designed to identify price levels manipulation points based on supply and demand areas. Banks usually enter into trades during consolidation times, and they need liquidity in the market to enter into positions. This article describes something different. Bank manage forex transactions for clients and trade forex from their trading desks , primarily using fundamental analysis and long trade positions.

Banks make profits trading forex in two different ways. When a bank act as a dealer for clients, a bank generates profit from the bid-ask spread. When the bank trades forex as a speculator, the bank creates profit on currency fluctuations the same as retail traders.

But bank traders have tremendous knowledge about fundamental analysis, and they use daily, weekly, and monthly charts, mostly in their strategies. Moreover, they are primarily long-term traders because fundamental analysis and economic reports can influence the market days and weeks later. Banks trade for clients and for themselves too. Banks drive the markets in 3 phases: Accumulation, Distribution, and Manipulation.

The manipulation phase is a false breakout phase. Finally, in the distribution phase, markets follow a big trend. Of course, these phases are theoretical. For example, let us replicate one simple bank trading strategy. Bank can use monthly CPI changes and exchange rate changes to create fair PPP value for the month before the current month. Buy trade: Go long three currencies that are the most undervalued lowest PPP fair value figure.

Sell trade: Go short the three most overvalued currencies highest PPP fair value figure. Then, every month, banks can rebalance and remove currencies that are not undervalued or overvalued. This term is widely used to describe the most significant market participants. Please note that these participants have an extremely crucial and substantial part of the market.

The banks indeed hold a vital position in the market among this list. However, kindly note that they primarily act as a market maker. Being the primary market makers, these banks drive the market mostly in supply and demand. Keynote at a glance: Smart money is a term to define the most extensive market participants. Smart money indeed has a strong position and influence in the market.

Banks are considered one of the prominent participants in the market making. Although they hold a speculative position, their primary responsibility lies in the market making. The forex market or foreign exchange is the largest globally when it comes to the financial market. As per a Triennial Central Bank Survey conducted in , forex trading far surpasses the stock market.

The forex market also features digital sites that run the currency exchange trade and has multiple distinctive qualities that new traders get surprisingly fascinated by. We will take you into the introductory forex phase to cover how and why traders find themselves progressively more attracted to forex trade in particular. The price The exchange rate price paid to exchange one currency for another drives the forex market. The official global currencies surpass in number.

However, the U. Apart from these currencies, other relatively popular ones are the Swiss franc, Australian, New Zealand, the Canadian dollar, etc. Currency trade can be conducted via spot transactions, swaps, forwards, and options contracts with currency as the primary instrument. Currency trading is also on the list among the businesses that operate 24 hours every five days worldwide.

The interbank market holds the first position regarding the highest currency volume being traded. However, big banks are the largest in the significant percentage of currency volume in exchange trade. This is because banks because bankss enable forex trade for their clients and handle speculative trades on bank trading desks alongside their usual banking business.

Central banks and government-owned and play a significant role in the foreign exchange market. When the central bank takes any action in the F. Like speculators, Central banks may carry out specific currency interventions to appreciate or depreciate their currency.

When this happens, its domestic currency is weakened effectively, leading to more competitive exports in the international market. It is with these strategies that central banks calm inflation. Such action also plays the role of long-term indicators for those trading in forex. When it comes to the most significant Forex market player collection, banks, central banks, portfolio managers, hedge funds, and pooled funds come second in position. Investment Managers conduct trade currency transactions for significantly large accounts like pension funds, endowments, and foundations.

Investment managers who have a global portfolio buy and conduct currency sales to trade foreign securities. These investment managers can also execute speculative F. These are inflation-calming strategies that central banks use. This also presents forex traders with long-term indicators. Firms in the import and export businesses also engage in forex trade to execute payment for their goods and services. The American firm must also exchange U. The reason companies engage in forex trade is to evade the risk that comes with the translation of foreign currencies.

So, for example, the same American firm might purchase euros from the spot market or engage in a currency swap agreement to receive dollars before buying components from this German company, which reduces exposure to foreign currency risks. Retail investors make a low volume of foreign currency trades compared with financial institutions or firms. Retail investors focus on the following fundamentals; inflation rates, monetary policy, and parity in interest rates. They also considered chemical factors such as support, technical indicators, resistance, price patterns.

Collaboration among Forex traders makes the market highly liquid and plays a significant role in the global market. When countries with higher-yielding interest rates start dwindling back toward those with lower-yielding, it will carry trade unwinding.

Then investors sell the higher-profit investments they have. For example, suppose the yen takes trade unwinds. In that case, it can perhaps result in big Japanese financial institutions and investors moving their currency back to Japan, provided they have substantial foreign holdings. This is because of the tightening of the spread between domestic and foreign yields. It is a strategy that leads to a considerable reduction in equity prices worldwide.

It endows central banks, retail investors, and everyone else to take advantage of currency fluctuations that characterize the global economy. There are varying reasons to engage in forex trading. Whether it is speculative trades that banks carry out, hedge funds, financial institutions, or individual investors, their sold motivation is profit.

With the monetary policies, currency interventions though rare, and exchange regime setting, central banks always have robust control of the forex market. Since these top ten banks are considered smart money, tracking them is vital for determining the overall trade success. Kindly note that tracking smart money is the foundation of any forex bank trading strategy. Thus, as a successful trader, you must check where the smart money moves in and out in the market. You also need to find out where the smart money is getting traded.

Having all of these details in hand, you will make a profitable trading decision. Yes, there are different rules and strategies present in the trading market. Please note that these banks follow a specific business model. Understanding this business model is essential as it will help you achieve consistent results quickly! This business model is based on a three-step process. If you want to know more details about this three-step process, please look at the following sections for more information.

Keynote at a glance: Understanding the forex bank trading strategy is very important. The business model follows a three-step process: accumulation, manipulation, and distribution. In theory, the forex bank trading strategy is based on a three-step process. We will discuss the details of these three individual steps in the following sections. But, before that, all you will now need is to understand a key fact. In every transaction in the market, there are two primary participants, i.

When you are trying to buy something from the market, someone must try to sell it to you. Similarly, when you are looking forward to selling something, you have to be someone willing to buy it from you. Thus, buying and selling are the two counterparts in every transaction in the market. The same thing applies true for smart money as well. Forex smart money concept represents bank trading strategy based on determining accumulation, manipulation, and distribution trading phase.

Usually, medium and long-term positions after the manipulation phase are the main characteristics of a smart money bank trading strategy. In the forex bank trading strategy, accumulation plays a vital role.

However, if you want to be a successful trader, you need to understand this strategy accurately. Your goal should be to track and find out the areas where, when, and how the smart money, i. To be more precise, you need to cautiously find out their accumulating secret.

You know when smart money is most likely to enter the market, and their respective positions will be your key to success. In that case, you can also specify the directions where the market will most probably move in the future. When you have an accurate idea of where the market will be moving next, it will benefit a profitable trading strategy.

This is the second step that comes after a successful accumulation. Market manipulation is quite a complex concept. Despite the complexity, you will still be urged to understand this strategy minutely to trade successfully. Consider an example, when you are just waiting to enter a respective market area, you will soon notice the market moves in the opposite direction. After a considerable accumulation period, s short-term wrong push or market manipulation period must be present in every market.

To be more precise, they will drive and manipulate the market to sell off their stuff after a considerable accumulation. This is a short-term manipulation period where the market trend may move differently. It may appear that the market is behaving against you during this time! But, at this point, you will need to be smart and cautious. This short-term manipulation gives you an extraordinary hint about a possible accumulation when the market trend will possibly go up.

If you can recall any significant market move that has happened before, you will surely notice a tight range-bound period known as accumulation. After the megabanks have accumulated a position in the market, there will be a period of false push or market manipulation. Many forex traders may consider this market manipulation period at the wrong time. But, if you can carefully visualize and analyze the market, you can avoid being a pawn of market manipulation.

You can instead make a profit out of it. After the phases of accumulation and manipulation, there is a distribution phase of the market. This is when the banks will attempt to push the price of the market area. Megabanks play a vital role in the overall market. An overview of the trading market, different financial instruments explained and the main factors that drive the market, general introduction of the trading market.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you can afford to take the high risk of losing your money. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Support FAQs How to open an account? What payment options are available? How to reset password? Company Why Fortrade?

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