US Dollar Index in Forex Trading

US Dollar Index in Forex Trading

What is US Dollar Index (DXY)?

You’ve undoubtedly heard of the popular Dow Jones and S&P 500. But you also heard of the index for the US Dollar this is used to calculate the strength or weakness of the US Dollar (USD) against a basket of other currencies, as well as the aforementioned price indices.

This index is very useful against the displacement of a variety of highly exchanged currencies in the creation of the US Dollar. Currency Basket contain EUR, GBP, JPY, CAD, SEK and CHF. It is highly inclined towards the euro, as this unit constitutes 57.6 percent of the basket weight.

Dollar index

It’s used by experienced Forex traders to diversify spot trades in the USD. The index is often used to trade EURUSD as the pair and DXY are going in opposite directions. When EURUSD increases, then the USDX will decline. You should be aware of that fact. And given that the US dollar index is heavily weighted to the EUR, it may represent the euro ‘s movement on the Forex market to some degree.

Suppose you trade EURUSD chart, the pair is moving in upward trend, so DXY will moving toward downward trend because both are in opposite direction, the index must be in a downward trend. If this finding is verified so you can take a long trading position on the EURUSD.

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Main Factors of Forex Fundamental Analysis

Main Factors of Forex Fundamental Analysis

The main factors in these analysis include macroeconomic factors. There are all important data involved from unemployment and inflation to interest rates and industrial production. Based on the study of the economic data available the Forex trader takes a competitive role.

It is now much easier for a Financial trader to be aware of important events in relation to the growth of the digital Internet. Many unique online outlets provide live news and business insight for consumers. A trader will rely, during the study, on the following three factors:

Unemployment Rate:

This is a prime economic vitality measure. When unemployment is high, it means the economy is poor, and it doesn’t have enough money to build jobs for people. This in turn results in a fall in the value of a national currency.

Interest Rate:

Each country’s local central bank has its own interest rate set. If inflation is too high, the central bank may well raise the rate in order to cool economic conditions. By comparison, if the economy grows gradually interest rates may be lowered to stimulate inflation.

Geo Political Events:

It can be a very significant factor in deciding currency behaviour. For Example May 2005, there was a suggestion that France would vote in opposition to the EU Constitution. Since France is crucial to the health of Europe economy, Forex traders have started selling Euros and buying US dollars.

This consequently forced the down the Euro. Traders had got it right. After all, France voted against the Constitution, with the result that EURUSD fell over the three days to more than 400 points. Whoever sold the euro, received thousands, and those who bought, lost very large amounts of money.

Success Forex Trader?

The Forex Scalper teach you best scalping trading strategy using supply and demand zones which is already traded and tested by thousands of TFS members and perform daily trades.

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FOMC Meeting in Forex Market

FOMC Meeting in Forex Market

What is FOMC Meeting?

By US law, the Federal Open Market Committee (FOMC), a committee within the Federal Reserve System, is charged with overseeing the country’s open market operations (buying and selling United States Treasury securities by the Fed). It committee of the Federal Reserve makes crucial decisions on interest rates and growth of the money supply of the US. The FOMC is the central organ of US domestic monetary policy. The Committee determines monetary policy by determining the short-term aim for the open market operations of the Fed, which is usually a target amount for the federal funds.

The Federal Open Market Committee ( FOMC)  the detailed minutes of these meetings offer some of the greatest insights into the monetary policy decision-making process and what the FED feels regarding economic conditions inside and outside the United States. Markets tend to concentrate much of their attention on key issues discussed during the meeting which indicate potential changes in interest rates.

FOMC minutes include more details on the spectrum of views of Committee members on the correct policy posture, on the U.S. economic outlook, and on the direction of the short-term monetary policy. Around the time of the target rate decision, the statement is released, while the minutes are released three weeks after the FOMC meets. The degree to which market participants should scrutinize the FOMC minutes to collect knowledge beyond what is included in the statement is an empirically answerable issue.

The high frequency reaction of asset prices to news reports is a easy and reliable method for determining how information is impounded into security prices. The size of the effect of these FOMC meeting minutes is close to the effect of a macroeconomic report on the stock market like the ISM manufacturing index, and Forex rates but is less than the market impact caused by the release of the FOMC statement and Non Farm Payroll. Nevertheless, the asset price reaction to the minutes has declined since 2008 indicating the FOMC’s increased transparency.

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Following Your Forex Trading Rules

Following Your Forex Trading Rules

Forex Traders write their rules of trade based on what they have learned from the markets. In addition, the rules of trade are often distilled from market wisdom. The trade rules provide a guide for new fx traders to navigate the market. Trading rules open insights for experienced traders. The reality about forex is that it can be an intense and stressful endeavor requiring a tight control of the emotions. Learning to trade forex takes patience, you’ll need time to master the basics.

Those that lack consistency or make choices that aren’t thought carefully will find themselves in a position of negative investment. Any not adhering to sound investment principles or allowing emotion to control their thinking will easily find themselves losing a grip on their investments. For those who adopt sound investing principles will reap the rewards of one of the liquidest and most powerful markets in the world.

Without discipline, one literally can not succeed in Forex Market. To be reliably efficient, you must have clear operating rules with respect to your trading, and you must obey them faithfully. Follow your plan, follow your rules of trade , especially the rules of risk management and money management, and you will be practically printing money into your account.

Plan your trade, so that you can trade your plan. Preparation is the mental test run of your future trades a kind of rehearsal of your outfit. You set the ground rules, as well as your boundaries, by preparing your trade in advance. If you know what you’re looking for and how you’re going to behave when the market does what you’re expecting, you’ll be able to be rational and stand aside from the process of fear / greed.

Since trading is often full of emotions, you have to have a trading strategy that involves a set of guidelines to which you adhere. It will help protect you against yourself. Just because the forex market is 24 hours a day online, doesn’t mean you’ve got to trade all that time. When you doubt it, then do not trade at all. Instead, study the market and use the insight that you would acquire to make potential successful trades.

Want to become Success Trader?

The Forex Scalper teach you best scalping trading strategy using supply and demand zones which is already traded and tested by thousands of TFS members and perform daily trades.

To become profitable from Beginner Trader and most successful Scalping trader in Supply and Demand join THEFOREXSCALPERS and trade with 3500+ community traders with daily analysis and educations which boosts your trading skills make you Professional Forex Market Trader.

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How to Deal with Losses in Forex Trading

How to Deal with Losses in Forex Trading

There is one feeling that FX traders hate naturally, the frustration of watching a losing trade turn deeper and deeper toward them would probably be. If the trade is left unregulated, things could very easily get very nasty. A position overleveraged can result in an outsize loss and as a position can move against you for an extended period of time, such losses can irreparably   affect futures.

In Forex market trading the most difficult part of forex trading is to deal with financial losses. It’s not only a matter of pain and misery, but it’s also a fact that losses are typically the trigger that drives traders to make their worst mistakes, which can result in even greater losses, causing a vicious cycle in which the trader’s account spins out of control. Sadly losses are an unavoidable part of forex trading and if you can’t recognize that, you can’t boost your trades or become a reliably successful trader.

While it is a natural part of the overall trading cycle, losing is something that is challenging for many traders, both beginners traders and pros. The primary factor behind the question of dealing with losses is the lack of comprehension rather than real psychological problems. Individuals who suffer loss underestimate the negative feelings attached to them, which may cause anxiety and despair. This eventually makes them stop forex trading altogether. Individuals who can’t live with the losing psychology end up quickly quitting the forex trading market.

The first stage of defeat helps you to handle the losing trade. You convince yourself and others in this process that your trade idea was incorrect, and that the loss was not your fault. You are moving on to rationalizing your trade setup after the denial point. It is the point in time when you point out everything about your trade idea that’s right and don’t even care about what you’ve done wrong. You quote the suitability of your trading strategy, benefit target, stop loss and entry point, but completely ignore the fact that you have actually lost the trade and made a mistake somewhere.

Although some Forex traders may benefit from forex trading on a regular basis, others are struggling to achieve the same level of success. Traders who are consistently effective can manage losses effectively, take them in phase and move on with ease with the next trades. They are confident with loss cycles, and are able to trade effectively with ongoing control, given the losses that occur. Through training in Forex Market themselves and working regularly, they are continually seeking to better their trades.

The Forex Scalper teach you best scalping trading strategy using supply and demand zones which is already traded and tested by thousands of TFS members and perform daily trades.

To become profitable from Beginner Trader and most successful Scalping trader in Supply and Demand join THEFOREXSCALPERS and trade with 3500+ community traders with daily analysis and educations which boosts your trading skills make you Professional Forex Market Trader.

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Basic Princples of Forex Trading Principles

Basic Princples of Forex Trading Principles

Forex reality is that it can be an intense and stressful activity requiring tight control of the emotions. Those that lack consistency or make choices that aren’t thought through carefully will find themselves in a position of negative investment. Anyone not adhering to sound investing principles or allowing emotion to dominate their thinking will easily find themselves losing a grip on their investments. Yet those who follow sound investing principles will reap the rewards of one of the liquidest and most powerful markets in the world.

All Forex traders who have joined forex are trying to produce the best returns. Nevertheless, some forex principles need to be known and followed for trade with profit traders. The attitude towards market trading is no different from the attitude required for surfing. Through mixing good research with successful execution the performance rate would significantly increase and like other skill sets good trading comes from a mixture of talent and hard work.

Have your plan for the trade. Build your program, which is focused on some important factors for forex trading. Command feelings. An unstable emotional in Forex may interrupt the decision-making process. Learn how to control your desires and emotions. Have your history info. Write down in which conditions the decision to open/close orders and the views on each situation are focused on and what factors. Constantly test your job outcomes.

Evaluation and research on mistakes are among the main components of effective trade. When evaluating loss positions it is important to be self-critical. You should stop making such errors after struggling with failure positions. It is better not to take the risk, with a lack of experience. In the course of price change, the market begins jumping up or down in a specific direction. You need to gain experience to learn how to use short-term fluctuations, thus minimizing risks.

Deal only when you believe in it. Waiting for the right time to reach the market is better than opening the order if you don’t understand the situation. Entering and exiting the market at the right time is important. When you don’t feel comfortable, don’t take the chance. A few missed pips can not be compared with the large loss, which rash action can cause. Later, simply open the order: the market doesn’t go anywhere.

To become profitable from Beginner Trader and most successful Scalping trader in Supply and Demand join THEFOREXSCALPERS and trade with 3500+ community traders with daily analysis and educations which boosts your trading skills make you Professional Forex Market Trader.

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