Currency War in the Forex Market

Currency War in the Forex Market

The issue of central banks and/or governments, intentionally manipulating currency markets over the past year, has been a hot topic. The practice of repressing currency rates in order to keep a competitive advantage was typically referred to as a “race to the bottom,” where global economies have been engaged in enormous monetary easing since in order to keep their competitiveness and to try to boost growth. Another term that is sometimes used to define this activity is ‘currency wars’.

We ‘re now in a time, in the last decade or so, after a long period that lasts for decades, where wars are fought using currencies rather than weapons. Countries realize that bringing devastation to other countries by targeting their economies, rather than targeting their armed forces, is easier , cheaper and less violent. That’s why we saw currency wars between the world’s largest economies which are basically a race to maintain their currency as low and as cheap as possible. The countries realize little that even though such wars may be less violent, the effects are as disastrous as conventional wars.

A currency war refers to a situation in which a number of nations are intentionally seeking to depreciate the value of their domestic currencies to stimulate their economies. Even though currency depreciation or devaluation is a normal Fact on the Forex market, the hallmark of a currency war is the large number of nations that may concurrently participate in attempts to devalue their currency at the same time.

The exchange rates decide the currency’s value of one country versus another. In a currency war a nation purposely lowers its value. Countries with fixed exchange rates simply make a notice. Most countries fix it to the US dollar because it is the reserve currency worldwide. Most nations have a flexible foreign exchange rate. They must increase the money supply to lower the currency’s value.

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Best Way to Start Forex Trading

Best Way to Start Forex Trading

The trading foreign currency on the currency market, also known as the trading forex, can be an exciting hobby and a great source of revenue. To put it in view, the stock market is trading around $22.4 billion a day and the forex market is trading around $5 trillion a day. If you looked into online forex trading and saw every chance to make money, you probably wonder what the best way to start forex trading is.

Since the forex market is highly leveraged, it may have the same appeal as purchasing a lottery ticket: a bit of a chance to kill. This isn’t trading though, it’s wagering with long odds against you. A better way to get into the forex market is to prepare carefully. Starting with an account for the practice is helpful and risk-free. While you trade in your account of practice, do your research and find the best materials you can, read among them the most frequently recommended Forex trading blogs and books.

Forex trading is like any other work: you must know the basics and practice before you engage in real-time. Forex is also a market with both universal implications (insiders benefit at the cost of outsiders, and more) and details (national banking holidays, volatile price points, statistical ties, and more). Unfortunately, some few hours of simulated trading on your computer and attention to a few self-help videos from Youtube won’t secure a stable revenue. No less tough than any other professional endeavor, the path to learning forex trading.

While the forex market is largely reliable, in that prices reflect all the information available at any time, in many cases you only need to be slightly faster or smarter than the average market participant to start a winning trade position. But behind this position initiation is a set of assumptions and a coherent disciplined understanding gained through the study of the market and the practice of execution of the trade. No less critical is understanding how to use your forex broker’s provided platform profitably.

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The Psychology of Support and Resistance in Forex

The Psychology of Support and Resistance in Forex

The method of finding support and level of resistance is one of the most important skills in forex trading for retail trader. This is so because learning the fundamentals of support and resistance will boost every method of trading. Support and resistance are different rates or areas on the trade chart, where a forex pair ‘s price would likely find opposition. The reason for this is that these are mental levels which show the market players’ different attitudes.

The cause that support and resistance work and the price can continue to hit and bounce off them is due to forex market participants’ psychology. There’s no magic, nothing more than common sense. One explanation of why it works so well is to think of the market traders’ psychology. Now there are many reasons traders are going to buy or sell, but they are usually driven by the profit motive either positioning themselves to make more money, or trying to ease the pain of losing money for a trade they’ve already taken out.

It’s a common thought that there’s only one kind of support and resistance and that’s just one thing that happens, the price. While lines of support and resistance are important regardless of the quality, some prices are more important than others. These lines of support and resistance are what are called levels of psychological support and resistance. Psychological support and lines of resistance emerge not because of the perceived value of a specific price to a currency pair, stock, bond, or security, but because it is a relevant “psychologically” number.

Psychological levels are price levels that tend to attract considerable attention from the consumer, and usually see a price reaction when checked. Fear, greed and herd instinct are terms that often come up when the financial markets are discussed. That’s because human emotions and behaviors are largely responsible for market price moves. Thus, a price chart can be seen as a graphical representation of emotions such as fear, greed, optimism and pessimism, and human behavior, such as herd instinct. The price charts show how market participants are reacting to future expectations.

 

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Why Account Size Matters in Forex Trading

Why Account Size Matters in Forex Trading

The Forex market is the most approachable financial market, requiring only a small amount of capital to open an account. Unlike the stock market, there’s no legal minimum that you’ll have to start forex trading. Research shows your profitability may be influenced by the amount of capital in your forex trading account. How much money you need to trade forex is one of the first things that you need to deal with if you want to become a forex trader.

Which broker you select, (Recommended ICMARKET) which trading platform or strategy you use is also important, but how much money you start with will be a colossal determinant of your ultimate achievement. However, not all traders are alike and not all of them do the same. A day trader can not need the same amount of money that a swing trader does to start forex trading. Your goals will also decide how much money you need to exchange forex. Are you simply trying to expand your account, or are you trying for daily revenue from your forex trading?

A bigger size of the account means an improved broker status. Spreads can be tighter, which means you’ll earn a little more and lose a little less in every trade. This is a clear advantage but certainly not the most significant advantage. A bigger account in some situations means better customer service with the broker and maybe other advantages. For example, Best Brokers can offer you boosted mobile services. It is easier to implement money management principles with more money in the account.

If you’re serious about forex trading it’s nice to have written down some specific goals. One of those realistic goals is how much money you gain from your trading activities. The size of your forex trading account strongly affects what is a reasonable return. It’s not reasonable to assume to make $1 million in a short space of time from a $10k trading account unless you take very significant risks that would wipe your entire account clean. If you have a clear monetary goal in mind, you may want to evaluate what size forex trading account to use to achieve your goals with reasonable expectations.

 

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Candlestick Patterns in Forex Trading

Candlestick Patterns in Forex Trading

Japanese candlesticks are a method of charting analysis used by Market traders to identify potential trading opportunities based on historical price data, including forex market candlestick patterns. Forex candles patterns are relatively visual in comparison with other types of technical analysis and provide information on open, strong, low, and near prices for the financial device, you want to trade. Japanese candlesticks are particularly useful in providing insight into the financial market’s short-term price movements-a valuable tool for day trading strategies.

 

Patterns of candlesticks fall into two categories: patterns of continuity and pattern of reversal. A continuation pattern shows the continuance of a trend, as their names suggest, whereas a reversal pattern demonstrates a turnaround of a previously defined trend. Candlestick patterns also fall into several different types, depending on the number of candles that make up a particular configuration, which can convey useful market information to the trader looking to perform the technical forex analysis. The simplest type of candlestick pattern consists of one candlestick only, while several candlesticks make up other patters.

One of the most important technical analysis aims is to identify market changes in price action direction. Since candlesticks provide visual insight into what Forex market psychology is, one of the most useful aspects of candlestick analysis is its ability to predict shifts in market sentiment, and trend reversals. We call certain Reversal Patterns candle formations. Important to note is that a reversal pattern with candlesticks does not necessarily suggest a complete trend reversal but merely a change or pause in direction.

Japanese traders who invented the system gave colorful names for their patterns. Both of these patterns integrate sound trading principles that emphasize the classic understanding of each particular pattern of candlestick charts. Able to recognize and understand multiple candlestick pattern interpretation is a powerful trading tool for any financial market like Forex. In addition, for forex traders, experience and understanding of candlestick patterns add extra depth to their experience of technical analysis and their ability to make successful use of it when trading the forex currencies.

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