Your personal and professional background is going to determine which foreign currency exchange tools you need to make a trading profit. Some people may be in a situation where they are surrounded by the news all day long. Thus, it’s entirely possible that they need help with advanced charting methodologies, such as what is available at the “Chart School” of “stockcharts.com”. On the other hand, someone who has an investment background in futures doesn’t need much help with charting, but really needs to spend some time investigating the different monetary policies of the world’s leading banks. It’s hard to make a consistent profit in forex without understanding the link between monetary policy, interest rates and massive forex pricing moves.
Some of the best profit opportunities come from trading interest rate-related inflection points. Some of them can be massive. For instance, since the Japanese Government started to change its monetary policies in late 2012, the USD/JPY has gone from USD/JPY 80.00 to over USD/JPY 100.00. And, the move isn’t finished.
Essential Tools For The World Of Foreign Currency Exchange
By far and away, the most essential tool for successfully trading forex is constant access to the news by 1 or more highly reliable news sources. Most traders rely on Reuters and Bloomberg quite heavily. Depending upon what you’re trading, that might be enough. However, if you’re trading any JPY-related pairs, you might want to keep your eyes on NHK (“nhk.or.jp”), the BBC of Japan. Similarly, if you are trading any currency pairs that might be impacted by news out of China (and, that includes the AUD/USD – make no doubt), then reading “Xinhuanet.com” is a must. For an alternative take on the day’s socio-political and economic events, nothing beats the almost acid “news” items posted on “zerohedge.com”, particularly regarding the world’s debt markets.
Sourcing The Best Foreign Currency Exchange Resources
Curious as it may sound, the websites of the world’s central banks are full of very interesting stuff that is directly applicable to your success as a trader. Specifically, all of them have a section labelled “monetary policy” and it is this policy that controls their country’s interest rate structures. When there is a change that was not anticipated by the markets, things in the forex world can get nasty quickly (e. g., the US Federal Reserve’s September 18, 2013, “no-taper-today” decision, which resulted in a horrendous slide in the USD/JPY, etc.). The AUD/USD will be adversely affected when “the Fed.” finally does commencing tapering (since this will raise US interest rates), but the AUD/JPY should find itself sitting pretty.
Making Your Efforts Within Foreign Currency Exchange Trading Pay Off
Changes in interest rates, like the Fed.’s taper decision, are inflection points and can form the basis for wonderful long-term “trend trading”. In such a situation, the key to success is to get into the trade early – at a very low leverage ratio (e. g., 20:1 or less) – and stay in the trade until prices become very overbought or oversold. In the case of the USD/JPY, a look at its weekly chart would indicate that the mid-2013 pennant is going to break to the upside, terminating near USD/JPY 125.00 sometime in 2014. Therefore, as long as the pennant (that started with May 2013’s high) is still in formation, it is not too late to partake of this long-term trend surfing opportunity.
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