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27/32
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Hints and Ideas about FX Majors

Ideas from last week :

  • USD enjoyed a ride against most currencies as US data helped a lot, ADP and NFP employment data were better, Wages growth at 2.9% VS 2.6% expected and all of this helped expectation of higher interest rate at (FED) March meeting.
  • Euro still hold last month gains VS majors as EU data still helpful, also most of (ECB) speakers agreed that next normalization step should be soon and some hint that QE may end at September meeting and all of this helpful for Euro bulls.
  • Aussie got a hit last week as most AUD data disappointed, Mean CPI Q/Q 0.6% VS 0.7 expected, Building approvals -20% VS -7% expected and all of this put heavy weight on Aussie.
  • Kiwi moved in mixed VS majors as no significant Kiwi data last week but Kiwi mostly affected by drop of Aussie which in most time move in same direction VS majors.
[list][/list]…
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23/54
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Here I will write a nice correlation between two kind of sports - Fishing and Trading (Yes from different point of view trading is not only the process of making money but currently I see it as a different kind of online gaming sport) What Fishing Is - This is the process where you have prepared a few things, bait, tools (cord, fishing tackle net and other).
Similar in trading are the instruments (indicators, charts and others).
The main object in the fishing is the fish. For me the main object in the trading is the volatility. Why? Because like for the fish you have to wait whole day (some times weeks or even moths) just for several seconds to few minutes of huge market movements The problem with the volatility is that is can be very hard to recognize it correctly and like in the fishing you can catch a small fish instead of the big one. In trading you can make two things either take the profit before the huge movement in your direction or it can be false volatility with several rangy movements which must be very carefully avoided.
The problem is who is the fish, you or the market. The market is setting several baits so that you stay away when the real movement comes. If you wan…
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Natalia_Kisenko avatar

Very good article!

RahmanSL avatar
RahmanSL 26 Sep.

I too have compared trading the forex to fishing which requires tremendous amount of patience and interest....when the market is not moving much, I compared that to small fish nibbling on the bait but then, suddenly, a big fish comes along and strips line off which is similar to sudden market movement which cause the currencies to spike.

Yes, it's very important to keep abreast of geopolitical and economic news (fundamentals) because some sudden events will move markets which can be very different from what the technicals are showing.

Good article and well thought out : )

megajorko avatar
megajorko 26 Sep.

Thank you very much Rahman. I hope that this knowledge will help us to stop act as fish but be the real fisherman :)

RahmanSL avatar
RahmanSL 27 Sep.

Like many sports fishing can be addictive and, likewise with trading the forex market, we have to curb our passion : )

annamuzova avatar
annamuzova 27 Sep.

Very very interesting. Good article

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21/40
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Центральные банки являются важными участниками рынка форекс, они так или иначе контролируют поведение курса своих валют, укрепляя их или ослабляя по мере необходимости и потребностей экономики. Поэтому можно смело заявить, что рынок форекс не ведет себя абсолютно бесконтрольно, контроль есть со стороны Центральных банков. Не секрет, что сильная национальная валюта вызывает проблемы у экспортеров, так как стоимость их товаров за границей растет и на них падает спрос, это также стимулирует импорт товаров в страну, слабая же валюта в свою очередь стимулирует экспорт и снижает импорт товаров в страну, но в этом случае инвесторы не захотят вкладывать средства в валюту которая постоянно снижается в цене, потому что они рассчитывают извлечь прибыль, именно поэтому Центральные банки меняют свою политику в зависимости от ситуации и потребностей их стран. Центральный банк - это банк, оказывающий услуги правительству и коммерческим банкам своей страны. Основные функции центрального банка следующие: регулирование обращения денежной массы и обменного курса национальной валюты, контроль за выпуском банкнот национальной валюты, кредитование и прием депозитов от коммерческих банков, а также контро…
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JuliannaS avatar
JuliannaS 15 Aug.

Хм, занятная статейка

yellownight avatar

в названии статьи хорошая мысль

samir_valiyev avatar

Good

samir_valiyev avatar

Well

megajorko avatar
megajorko 12 Sep.

Helpful article

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15/58
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Introduction
The global economy is in turmoil and central banks from the breath and width of the globe are struggling to spur economic growth in 2016. They have deployed most the weapons in their arsenal in a desperate attempt to spark economic growth, including negative interest rates and massive stimulus packages but the much need growth remains elusive. Consequently, central banks are looking for new ways to spark economic growth, and the use of unconventional means such as "helicopter money," have become topical issues.
This article seeks to demystify the concept of helicopter money, making it clearer and easier to understand to the ordinary person.

What is Helicopter Money?

Helicopter money is a reference to an idea made popular by the American economist Milton Friedman in 1969 in his paper “The Optimum Quantity of Money.”
The basic principle is that if a central bank wants to raise inflation and output in an economy that is running substantially below potential or targeted levels, one of the most effective tools would be simply to give everyone direct money transfers. In theory, people would see this as a permanent one-off expansion of the amount of money in circulat…
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Natalia_Kisenko avatar

well done!

olya2517 avatar
olya2517 23 Sep.

very good

Armands avatar
Armands 25 Sep.

Instead of giving more money directly to everyone, they give it to selected ones!

VictoriaVika avatar

great article!

Sharpshooter avatar

Точно. Так и вливают они обычно)

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5/47
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Introduction
As the global oil and energy prices plummeted in 2015, so did the inflation and growth rates. This left most central banks in quandary as inflation and growth rate numbers ran far below their targeted levels.
This article looks at the successes and failures of the current expansionary monetary policy regimes in the world with particular emphasis on the economies employing the negative interest rate policy.
What is Negative interest rate policy?

A negative interest rate policy is a monetary policy tool whereby nominal target interest rates are set with a negative value.
Rationale for Negative Interest Rate Policy

During periods of economic downturn and deflationary pressures, central banks often lower rates to stimulate growth and to raise the inflation rate. The main objective of negative rates is that they provide an incentive for private banks to make loans. With the negative interest in place, storing money at the central bank in the form of reserves or holding lots of cash will become unattractive and projects that were not worth funding even in a low-interest-rate environment might now look worthwhile.
In some cases, central banks turn to negative rates to lower…
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juraj avatar
juraj 3 Aug.


Ilolor- it does not matter what the CBs state on their website, important is what they actually DO and how they make their decision.

https://fred.stlouisfed.org/series/PCEPILFE/#0

Fed never even declared its 2% target in the way ECB did, yet we are presuming they want to achieve 2% inflation. Their models are based upon PCE numbers and when you look at the history it becomes clear that FED always acted as if they were targeting core PCE. They were ok with headline inflation of 3%+ yet core PCE was at roughly 2% so they did nothing. Back 3 years ago when headline surpassed 2%,

juraj avatar
juraj 3 Aug.

Fed was in no hurry to lift the accommodation  because core PCE was still well below 2%.

If ECB officials declined to cut rates and step up QE saying core inflation was still positive and much better than headline, then they are de facto targeting core and not headline.

And if BoJ is refusing to step up easing for 2 years because core inflation is faring well, even though headline is back below 0 then they cannot be targeting headline inflation, no matter what their website says.

And lastly there are good reasons why you should overlook supply shocks (food&energy)

juraj avatar
juraj 3 Aug.

I am finished here- the comment system is a piece of... limiting me to under 600 characters which makes it impossible to express my intricate arguments.

Take care, it was a nice talk to you.

Mattie avatar
Mattie 3 Aug.

More often than not, it is for political reasons that the Fed Banks raise or lower rates. 

FXRabbit avatar
FXRabbit 26 Aug.

Very interesting article!

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22/53
Ranking
Dear community members,
In this article, I shall reveal my winning strategies used in fundamental analysis contest. I hope you will also gain some insights on approaching trading from fundamental analysis perspective.I am a regular participant in the Fundamental Analysis contest. I have won many prizes. You can see my contest performance below.
So, let's begin !!!
(1) Knowing the big picture from current bias of central banks
My first strategy is based on deciphering current bias of central banks which will help you in correctly assessing the outcome of many economic indicators.
But firstly, let us understand the impact of central banks on currency exchange rates. Currency exchange & interest rates are highly correlated to each other. By controlling interest rates, central banks can control both inflation & exchange rate levels. Higher interest rates offer lenders a higher return relative to other economies of the world. Therefore, higher interest rates attract external foreign capital & cause the currency exchange rate to rise. The opposite relationship exists for decreasing interest rates - that is, lower interest rates tend to decrease exchange rates due to flight of externa…
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bharatholsa avatar

agddivisas thanks :))

Agnessa26 avatar

good job =)

monjurul avatar
monjurul 24 Aug.

Nice strategy.

pipx avatar
pipx 26 Aug.

Thank you for this bharatholsa . I stink at Fundamentals, I will try applying this in September and see what happens :-)

bharatholsa avatar

pipx thanks :))

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19/53
Ranking
Preface :

In my last 3 articles, I finished last one talking about central banks decisions especially about interest rate decisions which is the most important and influential data affecting currencies, most interest rate decisions are in specific time which is known from long time, so you can take your care before making any trade from time near to time of release, in this article, talking will be about direct intervention from central banks which often surprises the markets and traders and may be brokers also.
Introduction:
Talking about Central Banks intervention always make us remember Swiss intervention last January, especially at 15/01/2015 when Central Swiss bank removed the 1.2000 cap of EUR/CHF, such data made one of the strongest historical movement, as example USD/CHF fell sharply towards 0.7500 from 1.0200, which means 2700 pips down, it means that the pair lost more than 25% of its values in one day, it was horrible day not only for traders, investors but also for banks, brokers and market makers.
What happened in 15/01/2015:

Swiss bank removed 1.2000 cap, data release was so surprise and hit the markets strongly, USD/CHF down 2700 pip, GBP/CHF down 4200 pips, E…
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Agnessa26 avatar

Good job

MrLOSS avatar
MrLOSS 7 Aug.

It's a pity in Dukasсopy binary options are limited to 1 hour.

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27/58
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Preface:

Please check my last article of the same topic before reading this new one,
Trading Forex using margins or binary options (1).

Trading Forex using margins or binary options (2).
Introduction:

In the last article, Situation 1, trading strong news was discussed in one part which is Non-Farm Employment Change, in this article, different impacts will be explained here from last central banks decisions.
How Central banks affect markets:

At most time, Central banks affect market by monetary policy which resulted often in interest rate decision which considered the most important and influential data affecting currencies, such data often have surprises which can send the currency strongly higher or strongly lower.
Sometimes, Central banks tend to intervene in not settled time, due to special event or to face surprised crisis.
So central banks often affect markets by:
[list][/list]…
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Natalia_Kisenko avatar

very useful article!

Agnessa26 avatar
Agnessa26 27 July

хорошая работа

Jignesh avatar
Jignesh 28 July

Good intro on the impacts of central banks

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25/51
Ranking
Role of Central Banks in Currency rates II In continuation with the previous article, role of CBs decides the movement and even it changes the trend. In continuation with the previous article, role of CBs decides the movement and even it changes the trend. Infact some CBs are proactive and some CBs some what late in setting the policy. SNB had come forward independently and fixed EUR / CHF floor of 1.2. At that time there was only huge movements in that pair and was threatening and there was a fear of deflation. But once the floor was put in place, the pair was very steady and it helped the swiss economy in a very big way . Same with BOJ. But in real terms they lagged some what due to fluid political scene. Once the strong government was elected and the PM Abe has indicated his desire to defeat the YEN strength, it is weakening day by day. Here no indicators work. No Holy grail here! Thatswhy even all the pull backs till now are shallow and prices are quickly jumping up. It is a trend change. Prices will correct for a overbought level. But only to some extent. If it has to correct technically, EUR/JPY needs to go 117, USD/JPY to 82 to name a few. Today’s sudden jump in al…
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Cactis avatar
Cactis 7 Feb.

wrong

Likerty avatar
Likerty 8 Feb.

You could expand more on the matter..

asad avatar
asad 10 Feb.

Good article. But the best one is if the chart enclosed or attached for supporting the concerned description. Ok, this is good supporting article to my next trading. Thank you friend.

doctortyby avatar
doctortyby 18 Feb.

Very interesting subject for me, but I would have liked to see more information on this article. The role of CB in Currency Rates is to keep them into certain ranges that would satisfy both commercials and speculators :)

SpecialFX avatar
SpecialFX 21 Feb.

It has to be said that the 1.20 floor was not the first one the SNB tried to put on the EUR/CHF, there were actually a few along the way that simply failed. The same with Japan, that many times intervened to weaken the yen, without any success at all. In my opinion Central Banks are not as powerful as people assume they are, they fail more times than they succeed. Just look at the way George Soros destroyed the pound in 1992... :)

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23/94
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   Forex exchange, the biggest and most liquid market in the world attract millions of small, medium and big size participants. They have different purposes and goals and different time horizons for their currency operations. Combined, all of their orders and positions produce a multilayered market structure, which determined the daily movements of the currency pairs and reactions of the market to news events.    The forex market is an OTC (over the counter) market. That means it has no specific central market place. It is fairly distributed among all the biggest financial centers in the world. The biggest center, which is responsible for the main currencies cash flow is London. According to the Bank for International Settlements April 2010 survey, London accounts for about 37% of the daily transaction volume. The other big centers are located in USA (New York) – 18% of the transaction volume, Japan (Tokyo), Switzerland (Basel and Zürich), Singapore, Hong Kong and Australia. According to the same survey in 2010 the daily turnover in the whole forex world is about 4 trillion $. Of this number 1.5 trillion $ accounts for spot transactions and the other 2.5 trillion $ accounts for f…
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Furian avatar
Furian 22 Sep.

Thing that we alway have keep in mind . Good stuff

Amelia avatar
Amelia 22 Sep.

Nice article)) I wish you good luck.

futures avatar
futures 23 Sep.

gongratulations!!!!

doctortyby avatar
doctortyby 23 Sep.

It's a very informative article... +1 for You

quantum_fx avatar
quantum_fx 26 Sep.

Thank you doctortyby and all of you! I am very happy that this article give a good responce and I will publish next month a deeper research into that theme!

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