Forex market trading has gained increasing popularity over the past few years. But how difficult is Bitcoin Code to succeed in the Forex trading arena? Or let me ask the question in a different way, how many traders are making persistent profits in the Forex market? Unfortunately very few, only 5% of traders are achieving their goals. One of the main reasons for this finding is that forex traders focus on misinformation while making trading decisions while forgetting the most important factor: price behavior.
Most Forex trading systems are created using technical indicators (the intersection of the muffin lines, oversold situations, selling on oscillators, etc.) but what are the technical indicators? Technical indicators are only a series of data points drawn on the chart; these points are calculated according to mathematical equations applied to the price of any particular currency pair. In other words, it is the price action drawn in a different way to enable us to see other aspects of the price.
There is an important conclusion to be drawn from this definition. The truth is that the readings obtained from these indicators depend on price action. Take, for example, the long-term mopings signal when the price moves up enough to allow the short-term muffin line to cut its long-term counterpart to a higher buy signal. Most traders believe that “the intersection of the muffin lines pushed the price higher” but what happened is the opposite, the intersection signal of the muffin line appeared because the price is the one that went higher. What I want to say here is that the behavior of the price in the end is what determines how the index works and this has to be taken into consideration when making any trade-related decision.
Trading decisions based on technical indicators without taking price action into consideration will give us less accurate results. For example, again if we see a bullish signal created by the intersection of the muffin lines as the pair approaches one of the important resistance lines. If the price suddenly starts to bounce back from this important level then there will be no sense to take this bullish signal into account as price action in the meantime tells us that the market will not go higher. Under these circumstances, the market will continue to fall down, ignoring the intersection of the muffin lines.
Please do not get me wrong, technical indicators are one of the most important aspects of trade. It helps us to see certain conditions that will be difficult to see just by watching price action alone. But when it comes to trigger compression, the combination of price action in our forex trading system will put the odds in our favor as it will generate more profitable trading signals.
So, how do you create a perfect forex trading system?
First of all, you should make sure that the trading system suits your personality; otherwise you will find it difficult to follow Bitcoin Code system. Each trader has different goals and needs, so there is no system that can suit all traders. You will always need to do your own research on various trading techniques and technical indicators to find a concept that works well with you. Be sure to understand the nature of the work of the technical indicator you will be using.
Second, combine price action into your trading system. Therefore, you will only consider buying signals if the price action suggests that the market will move higher, and in the same sense, the sell signals will become more serious if the market is given a signal to the downside.
The third and most important thing is that you will always need to follow the Forex trading system you have chosen accurately. Try it first on a demo account. And then turn to open a mini account to work on it and when you finally feel the profitability of dealing with this system and the possibility of achieving the results of continuous profitability applied the system at the expense of your usual trading.
In certain forms, Forex was present among us, since that time when there was no electricity in the caves. Old people were always trading their own currencies: possibly food, animals or some shiny metal. But with the creation of modern coins (coins and then paper), different peoples traded currency against each other. In modern times, currencies are widely traded through giant financial organizations around the world. The birth of the retail market in mid-1970 allowed non-commercial players to trade Forex. However, the most significant change in the industry came in 1996 when Forex trading became available on the Internet.
At present the Forex which was a child grew up until he became the real giant. More than $ 4.5 trillion is traded daily in the Forex market with about $ 1 trillion of which belong to some of the activities of traders like me and you. These figures reinforce the reputation of Forex and tell us about the vast opportunities in which we can make profits in Nova APP Review market. However, wherever benefits are found, risks also come. Not all Forex education companies tell us this fact – all that matters to them is to be attracted without thinking to the trading world.
In this article, I will try to give you the basics – 5 steps you should always keep in mind to go the profit path that everyone wishes to reach in the largest financial markets on this earth.
1. The noise will wipe it.
One deal would make me a millionaire. Peace be upon you Mister Source!
Nova APP Review is what brokers want to think about when you start your forex trading. Relax and fit these words into so-called “truth lies.” It’s not Schwarzenegger’s action film, but it’s a quirky reality. You can become rich in Forex – this is “true” though, the lie is that this can come in an easy way. If you are not disciplined, ready and persistent, chances of winning will be close to lottery tickets. Approach the market with all responsibility and balanced framework, set your goals and remain as committed as in fishing, success comes to those who wait and then beat them.
2. Do not stay hungry
Of course, I do not mean that you can trade Forex after you have breakfast. Before you put any cent into this gamble, think about whether you’re ready to lose it. Do not leave your family without food or clothes after you bet all your money on the “black” and lose until your money becomes “zero.” Trading using capital that you can afford to lose without seriously affecting your normal life. As a trader, it must be admitted, more than 80% of new traders face loss. So think twice. If you are ready to say “goodbye” to your investments and still standing on your feet, then you may have the opportunity to become one of the 20%.
3. Read and listen and learn
Just as you will not lend your money that you are tired of earning to someone called Philip you will only meet him once. You will not jump in this dangerous and volatile market like Forex without knowing “what is”, “who is” and “why.” Your full search for the subject should include all aspects of the market: how to develop, where to go, etc. Study the Forex methods in a more detailed way than I did in the first paragraph. Then you can talk to other traders and listen to what they are saying (such as going to the forums) about trade training or about good business practices, best Forex tools and services, best advice on forecasting market movements and so on. Also learn to read graphs, understand Forex news and how to distinguish between them, and (most importantly) know your strengths and weaknesses to get started on them from now on.
4. Use several baskets to collect eggs
The path of success to Forex (if I may name it) is a thorny way to deal with the head of your owner with all care. Do not put all your assets into one deal – use a certain percentage of your account balance. Although these percentages are subject to discussion, but expect a loss in your account, try to predict how your account will be after you lose the deal. My advice here is to use stop loss and take profit, trade short positions, “kill” your greed, and never think of compensating for loss. Loss means loss. Extending the stop-loss point in the hope that the market will reverse its path is useless, usually the market does not do so. “Your best friend” is the trend, but he may become your worst enemy. I also recommend that several currencies be traded to divide the risk on a number of trades and currencies.
5. Do not let him reach your head
It’s like a rock band nominated for a musical prize: they have not been able to win it yet, but they have already turned into polite and arrogant creatures. For traders, it is not appropriate for them to become enthusiastic or keenly keen on their deals. At any given moment the situation may reverse. If you leave your Forex successes up to your head, they will change your trading psyche, which may lead you to take risks that you would not have experienced before.
Be consistent with yourself and get the order one by one. Such as the rain-soaked deserts, were grateful for your earnings. Continue with your Nova APP Review current system if it is profitable. Stick to your plan and do not listen to your senses that tempt you by taking profit or stopping loss.
If there is a lingering word, I would like to say that the Forex market is a huge thing. You can win it easily and in large amounts. If you bet on “black” because this is your favorite color, you can win this way only in gambling halls, but not with Forex. Treat him like any other business (with some responsibility) you will end up with multiple benefits.
Just as you hedge your horse race betting you can do similar hedging while trading in the Aria APP Review Forex market.
What is the Forex market: Forex markets and stocks have some similarities in that both include buying and selling for profit, but on the other side there are some differences. Unlike the stock market, Forex has a higher degree of liquidity, which means that more money goes hand in hand every day. One of the main differences you will find when comparing Forex to the stock market is that Forex does not have a central place to conduct exchanges within it and it never closes. Forex involves conducting exchanges between banks and speculators from around the world and can be accessed 24 hours a day during the weekly working days.
For those who are not familiar with the Forex market, the word “hedge” may mean nothing to them at all. However, those who trade normally know that there are many ways to use the term in trade. Often when you hear this phrase you will understand that it is intended to try to reduce risk during the trade. It’s one of the things that anyone with investment plans needs to keep in mind, a tactic that is used to protect investments to a certain degree.
While hedging is one of the common terms of trade, it may also be ambiguous. It can simply be considered an insurance plan. When you hedge, you secure yourself if one of the negative events suddenly occurs. This does not mean that hedging will negate the appearance of this negative event or that you will exit completely intact from this position without any damage. It only means that if you properly hedge you will not suffer from a huge adverse impact. You can think about insurance like your car. For example, when you buy an insurance policy and the car is involved in an accident, this policy will not prevent bad things from happening, but its role will be limited only to reducing your losses and helping you recover faster than if you are not insured.
Anyone involved in trade can learn to hedge. From large companies to individual and small investors, hedging is something that is widely practiced. The manner in which they are performed involves the use of certain market instruments to offset the risk of any negative price movements. The easiest way to do this is to hedge the investment with another investment. For example, the most common method of use is to invest in two different assets with an inverse relationship. However, this method remains expensive for some people; however, the protection you will get from this hedge will equal the cost you will incur most of the time. As you begin to learn more about hedging, you will begin to understand why many people do not understand everything about it. The methods used in hedging are carried out using some derivatives. These derivatives are often more complex financial assets and are used by seasoned investors.
When you decide to hedge, you have to remember that it will cost you. You should also make sure that the benefits you receive from this hedge will be sufficient to offset this cost. You should also make sure that these expenses are justified because if they are not, there will be no need to use such hedging. The goal of hedging is not to make money. You will not make a good profit With Delta APP Review by hedging yourself, because making a profit generally requires some risk taking while the hedge is primarily used to hedge losses. It is true that losses are often unavoidable but hedging can provide some comfort. However, even if this bad thing does not happen to you, you will still have to afford the hedge. Unlike insurance, you will not receive any compensation for your hedging, which means that the situation may be even worse with the hedge, which will not be useful in any case to protect you as you may think.
Always keep in mind that most investors may never be hedged in their entire business careers. Short-term volatility is often seen by the vast majority of investors as something that does not require concern. Thus, hedging may be something that does not make sense at times. Even if you decide to hedge, you still need to learn hedging techniques as a great way to better understand the market. You’ll see giant corporations and big traders using this technique, which may make you feel a bit confused when you wonder why they behave in a certain way. So when you learn more about hedging you will be able to fully understand the strategies used by them.
Whether you decide to use the advantages of hedging or not, you will continue to benefit from it. You can use it as an insurance policy during trading. Though you should always remember that hedging, despite its advantages, remains expensive, so be sure that hedging costs will not hurt your potential profits. Make sure these costs are realistic and also whether your need for hedging itself is realistic. You will be able to use hedging to reduce your losses but you should know that hedging will not protect you from negative things completely. Hedging will give you a better understanding of how big traders work in this market, which in turn will help you to be a better player in the trade match.
Remember, hedging must be left to the professionals in the industry, except that you are trading in Forex for a hobby and you do not have much to invest in.
Monaco Treasure APP Is Monaco Treasure SCAM OR REAL Investments? When I studied the principles of investment at university, I learned that the share price reflects the values of the company. Using fundamental analysis, there were many ways that one could use them to analyze the financial statements of companies to see if the current stock price was a good investment or not. You can perform horizontal and vertical analyzes on standard corporate listings which are just important terms to compare numbers. You can calculate specific financial rates to get a better understanding of the company’s liquidity, working capital management and its long-term viability and profitability. I applied these concepts when I started trading in the Monaco Treasure APP. It did not take long for me to find out that if the stock trade was trading on time frames of less than three months, decisions based on such analysis would not be feasible. I did not want to buy stocks to benefit only from dividend payments because I wanted to trade for capital gains.
I was dissatisfied with the knowledge, tools and methods I used in trading the markets. With my desire to trade on time frames for less than three months and my firm belief that sentiment is heavily affecting trade, I started looking for other ways to buy and sell shares.
I went back to the textbooks I had studied at the university. I wanted to know other ways to analyze financial markets. During my trip I read and learned that one can analyze markets in one of two ways: fundamental analysis and technical analysis.
When I read a newspaper once I came across a declaration about a trade seminar. While reading this ad I saw these words: Technical Analysis. One of the expert traders would talk specifically about the subject I was interested in learning. The seminar was free and was welcome to anyone to attend. So I called one of my friends and asked him if he wanted to attend this seminar, and already agreed.
The seminar was organized by one of the companies involved in the sale of courses related to trade: courses to teach how to trade the stock market. When we arrived, we were taken to a small room. About 30 people were present. The speaker appeared to be a veteran trader and had previously published two books on trade. Let’s call it Pu’er For the purposes of this article, Pu’er had a strong presence and was a huge man with a tall corpse and a curly head.
I sat on one of the seats in the front rows trying to listen and understand every word spoken by this man. His lessons were planted within the seed that eventually helped me grow to be a trader over the years. Many times I heard his voice in my mind remind me of the lessons I learned from his books and the lessons I learned from him on this day. I will try to count the lessons I learned from this man to help you in the same way he helped me.
This man attracted my attention from the very first moment. “The stock market is a game where people try to steal money from each other.” This is the goal of the game, a legal goal anyway: I wondered what Wall Street experts would think if they heard that guy. .
“If you’re going to join this game, you basically get the permission to grab the money of the other people and in return you will not be afraid to take your money if they can. Do not forget that you are in this world will play with a group of the most brilliant traders. So, if you go to war to fight an enemy with real weapons it will be better to make sure you do not go and you only have a plastic gun. ”
Pu’er mentioned that many people rush to the markets to lose their money. The phrase seemed funny but I saw that it actually reflected the only result one can draw when most people see starting trading without sufficient preparation and without educating themselves. Of course, most of us do not open a deal in the hope of losing their money; however, this is exactly what they do when they are Monaco Treasure APP Trading without sufficient willingness.
Most people know they need training before they can pilot a plane or have an operation, but I do not know why they think that making money from the trade is not easy. Is so easy: he looked very emotional at this point.
“Trade is difficult,” Van said. Only about 5 percent of people know how to trade profitably. So the likelihood of finding someone else who knows what they are doing seems very slim. Do not just rely on the advice of your broker, your account manager, or anyone else. The only hope of success is to know yourself and the better you do, the more likely you are to succeed.
Boer also said, “When it comes to buying and selling stocks, there is no such thing as investment.” People usually refer to the concept of investing as a long-term trade: For me, when people keep their investments for five years or more with the intention of selling them later, They actually do trade: but in the long run.
“Do not buy stocks just to take advantage of the payments you receive from dividends. They only offer trivial amounts,” he said. “Trading just to make money from capital gains.” “Buy from bottoms and sell at the top and that’s the way to make profits.”
In this period, I was puzzled about the concepts of short term trading or long term investment. I did not know if I would take the right approach to try to make short-term profits. Boer was strongly stressed when he was exposed to the issue.
We asked the guy if we knew what drove prices up or down. I remembered what my university teacher told me and I answered that the price moves up and down close to the fair value of the share.
He turned his attention to and asked me, “What is the arrow I am trading?” XYZ
(I changed the arrow name for the purposes of this article), I responded with great happiness. I thought he would probably press him for a tip or two of him about this stock.
Pu’er asked me and you know what the fair value of XYZ is.
I put my head aside and said, No.
He surprised me when he said I’ll tell you what XYZ values are: zero !!
I was surprised by his answer. Zero? So what do we pay for when we buy this stock? Then the man clarified his idea.
“Price is just a perception” – is to imagine people about what they think about the value to which the stock price should be.
“The key to success in trade is psychology,” he added. psychology ? I thought about it. How does psychology enter into this? . The stock market looks like a poll. It is a measure of what people expect about what will happen. If they think that the price of the stock will move up, you will see a bullish movement on the chart because there are a larger number of buyers and then sellers are raising the price because some of these buyers will accept the purchase at higher prices, “Boer explained.
Use an example to explain the investor’s typical behavior when trading without a system. As I explained, I realized that my own business behavior was similar to what he said.
It seemed to me. When I bought and sold the stock I was asking about the quality of the people sitting on the other side of the deal because they seemed to me to be very smart. Now I know . They are people like Boer who were on the other end of these transactions doing exactly the opposite of what I use methods similar to the one he was mentioning. They were looking at the price of the stock according to the approach and philosophy is quite strange to me. Traders like Boer were making all the profits while traders like me were the losers.
I shook my head when I realized there were other people thinking that way. I was thrilled to learn that there was another alternative and a different approach that I could use to analyze markets.
What you really need is to develop your trading system. He shouted at everyone. “Without a trading system, you will fail, I guarantee you this.” This trading system should be something designed for you and for yourself. Even if I give you my system in circulation, I’m sure you will fail to make any profits because this system was not designed for you, but rather I am. That’s why you need to learn how to use the tools and possess the skills needed to become a trader.
I accepted his advice without fully understanding the concept that the trading system is appropriate for the private trader’s personality. This has stayed in my mind for a long time. The wisdom I found in his advice remained stuck in my mind when I decided to learn more about the nature of trading.
Boer turned our attention towards the graphs on the screen of the laptop. All I saw was lines, curves, rectangular boxes and more jagged lines. Professional Rolling Tools: I thought that at the moment I see the tools used by my opponents in the market in order to defeat me all the time. My heart was beating faster than usual and I felt a great dread. I wanted to get these tools.
Boer was asked about the trading platform he uses to analyze markets. Tell me already. I also asked him about the number of indicators he uses. At this time I have read enough about technical analysis to the extent that I can see that technical analysts are using indicators in stock price analysis. There were many indicators to choose from, so I wanted to know the number of indicators used by professional traders. Start up his fingers then said “seven.”
I think that many people in this lecture did not read enough about the basic analysis, but at this time I had read enough about him and that’s why I was almost the only person who was involved in talking to him and asking questions. Art has gained more knowledge and wisdom and the man was already willing to give me what I wanted.
After that, I heard one of the most important lessons I learned from him about how to reduce my losses during my first years in trade: “Trading very little to the point where you consider it a waste of time, I suppose the next deal will be the first of a thousand of your deals. Your life. Even though your profits will be lower, your losses will be less, too, so there is no need to hurry. Do not rush to become rich very quickly. ”
Men were advised novices like me that they should trade through deals of small size. This means that you buy a few stocks at first. I was fascinated by what he said. I never knew before that a person should trade in this limited manner.
In the end, the seminar ended. I took the brochures and pamphlets given to us by some staff. In one of these releases was the name of the program he uses. They were selling the program with some of the courses they offered. I could not afford the full package but I realized I had to buy the program that Boer was using. I decided to learn as much as I could about how to use charts and charts to analyze the market and saw that I needed to develop my Monaco Treasure APP Trading system.
For my friend he said he had a car loan that he should pay attention to first and he would think about stock trading later or when he could save some money for it.
A few days later, I received a call from the organizer of the seminar telling me that based on the questions I was asking tonight, they thought I was the person who could make the most of this package. Boer was asked to clarify the need for the importance of learning trade because he has the ability to trade in markets. Because of this he was able to sell the courses well. Pu’er looked someone with experience and knowledge. He managed to illuminate the path for me and many others in this room about the much to learn. I bought some of these booklets but I did not have the ability to buy the entire package despite my need for it so I asked the salesperson on the other end of the line whether I could work for them in return for this course.
I could not get this course but I bought the program from another distributor at a cheaper price. I also bought two books that Boer understood. I discovered that I could possess skills and wisdom through self-education. I learned a lot from these two manuals and from the use of the program. I considered that the opportunity to attend such a seminar was a “gift from heaven” to me. Whenever I was Pu’er, I thank you. You – and others like you – _ made me know its value transfer knowledge and experience to others so they can benefit from it.
In the past when I started learning about investing, I decided to start from the first point and read basic books on personal finance along with “guidelines” to understand everything that goes on in the investment world. Most of these authors were knowledgeable and knowledgeable, but their investment advice to me was highly conservative and not commensurate with my personal ambition. They repeat literally a chapter after separating in their writings the difference between conservative investment which, according to them, may yield up to 5% per annum in return for the “most risky” investment, which usually means diversified stocks – Epix Trader investment funds that may (I think) the first . What kind of returns can you accept in the stock market? Well they say that the market since Adam and Eve were created rises at a rate of 10% per year. Famous indicators such as the Dow Jones and now the most famous S & P500 always “record continuous rises over time” just as real estate does.
Now, these market signals are being followed by investors like the Golden Calves. Frequently, I have the notion that there are hundreds (if not thousands) of fund managers and other “professionals” who are in this market with Harvard degrees and decades of experience and millions of dollars under their administration and spend about 15 hours a day in Analysis of any information, even a simple issue in the market only in the hope of defeating these golden calves with a few points.
If that is the opportunity I will have in this market. If the fund manager who eats, sleeps and breathes in the market and has more than the number of head hairs can not achieve an annual return of up to 20% on a regular basis … Well … Forget it, young … Your chance is almost nonexistent. So I thought it would be better to buy some shares in the XWZ investment fund and accept some of the crumbs that stock geniuses will leave on the table.
The Forex market gives many advantages that the stock market does not have. Most of these features have been killed in search of various forums, blogs, articles, e-books, etc. However, it is good to reiterate this positive (my personal conviction comes at last): The Forex market offers unprecedented liquidity, with more than $ 2 trillion traded daily, which makes it almost full to buy or sell Instantaneous. This in turn means a minimum of price slide and a higher degree of profitability. “Paper trading” in the stock market in exchange for actual trading is quite different, because trade orders may not be filled immediately. The difference between Epix Trader Forex trading on real account and demo account is almost non-existent. – Forex is available 24 hours a day and 5.5 days a week, compared with the morning trading hours of the stock market The Forex market can not be controlled by major entities. HNWIs, banks, and fund managers with significant weight in equity markets can have a huge impact on price movements. But given the huge volume of Epix Trader currency trading that flows on a daily basis, the market can never be moved by “big hands” until central banks can not control the Forex market Forex offers a leverage of 1: 200 compared to a 1: 2 stock market leverage . – Forex does not have any restrictions on short selling, unlike the “upward” rule that governs the stock market – Forex can be traded anywhere in the world even in IRA camps. Forex profit is taxed at a rate of 60/40 your preferred, regardless of the mode of trade you use (Yomi, Song or Central), as opposed to tax penalties imposed on short-term shares.
The menu is still going on, but the best feature for me is the psychological advantage. I know it may seem a little silly, but fear and fear sometimes defeat us even before we take the first step. I do not like the idea of living in competition with the “professional managers” who know the fundamentals of the market more than I know or can know. my life . But in Forex, you always play in the field and at the level where you are comfortable. I have no mind to compete against anyone’s ideas about what “acceptable and realistic” profits are and what profits are “pure fiction.” All I want is to keep trading until I find an acceptable rate of risk to return and consistent profitability opportunities. So my self is the only thing I’m competing against in the Forex market.
How interest rates are set – This is one of the common questions loan borrowers receive. The first thing that most customers or potential customers will ask is “How are interest rates set?” Or, “What interest will they receive?” It is understood that the interest rate is what basically determines your monthly payments. Essentially, the interest rate is the amount you will pay the lender in return for lending you the money you need as a loan to your home.
How are interest rates set?
So how are interest rates set? In general, the longer the term of the loan the greater the risk to the lender and consequently the higher the interest rate. Of course, it is not as simple as there are a number of other factors that indicate their interest in determining interest rates. Here are the essential details of how to set the loan interest rate you will incur to build your home in California. There are three major US interest rate-setters:
The US Federal Reserve determines the monetary policy of the United States of America. There was no federal banking system in the United States from 1783 to 1913 but all this changed with the Federal Reserve Act of 1913. Ostensibly, is the central bank of the United States. But do not let the American Fed fool you – it is not a federal government institution or administration.
Federal American Privacy Organization. There are 12 regional banks of the US federal system throughout the United States. In addition, the Fed constantly seeks to implement a variety of monetary policies in a concerted effort to counter the deflationary and inflationary pressures that may result from changes in the local and global economy. The US Federal Reserve meets eight times a year and often any interest rate changes are announced only during one of these meetings. The Fed’s 12-member board of governors controls interest rates by changing the interest it takes from banks to lend money.
Here we will try to explain the mechanism in which the Fed affects interest rates. The bank is lending money to banks in return for mortgaging the commercial paper they own as collateral. The Fed essentially receives interest rates on loans it gives banks. This is called the discount rate or The Infinity APP. Banks or borrowers then lend to the consumer in exchange for the interest rates they set. The effects seemed intuitive. The higher the Fed’s discount rate from the bank, the higher the key interest rate because the bank wants to meet minimum costs and profits. Many people believe that when the US Federal Reserve hears that changes are taking place on the base rate, this will automatically affect interest rates. This is not the case. The increase or decrease in the basic interest rate may affect the home banking credit line (HELOC) but it will not affect interest rates. Interest rates also fluctuate according to loan programs available to borrowers. (For more information about the loan programs on our website, please visit the following link).
The bond market fluctuates on a daily basis and is a key determinant in interest rate setting. In fact, one can speculate with a high degree of accuracy and according to any movements of the bond markets on one of the working days if there will be an adjustment in interest rates either up or down depending on the situation in the bond markets, especially ten-year bonds. For further clarification, there are different types of bonds that can affect interest rates:
2 year bonds
The underlying bonds that affect interest rates are those that are for five years and ten years. To see the actual and immediate movements in the bond market, visit https://www.treasury.gov/ to find out the current bond prices. This is a site that I watch daily. The bond market is highly volatile. So how do you read the charts to see if interest rates will jump up or down?
Looking at the 10-year chart (on the far right), if the ten-year bond price jumps soaring to 99/32/32 to 28/32, then interest rates are likely to fall below current levels. On a daily basis, California loan clients receive interest rate sheets from lenders (we work with more than 400 lenders so they are widely available).
If the volatility of the bond market leads to a significant increase or decrease in the premium premium of their loan (discount), it will affect the interest rates offered to customers, which will decline in the example. If the bond price does not fluctuate significantly during normal business hours, the interest rate will not change. Every morning the interest rates are received at the office. If there is a need to adjust the interest rate, the underlying lenders will make a change on the interest rate sheet to their intermediary partners.
As I mentioned, setting interest rates depends on the yield on the bond market during any time period such as The Infinity APP. Let’s take the following example. If a $ 100,000.00 bond falls to $ 95,000.00, the associated rate of return will rise significantly. Because of this high yield, mortgage rates should cover the high return to achieve a return to the lending institution.With everything else going, fixed interest rates on mortgages will tend to rise.
The multiple powers in the economy
There are many factors affecting California’s home loan interest rate. Higher interest rates may cause volatility in equity markets, which in turn affect the bond market. In fact, bond and equity markets are opposite sides of the same currency. One can not move without the other. If the value of the US dollar rises, bond prices fall; they also fall as oil prices fall. In general, when bond markets rise, stock markets are falling. In addition, if the economic data is better or worse than expected, it will lead to fluctuations in the value of USD pairs in the spot forex market, which will affect the bond market and then interest rates. As a quick example, a few weeks before this article was written, the new jobs report in the United States was expected to be around 350,000 – but the actual reading showed only 10% of the expected 35,000 jobs.
As soon as the report was released, the GBP / USD jumped higher. The pound or the pound strengthened dramatically as the value of the greenback declined. One of the forex traders I know made $ 3,500 in five minutes because he expected the job numbers to come below expectations.
Interest rates also declined in the same day as a result of negative job report numbers. When I went to the office this day, one of the smart loan clients closed down some of his loans knowing that interest rates would fall on that day. Indeed, the US economy is a very connected and fluid body – it can never remain silent or motionless. Some key economic indicators that may affect the economy and consequently interest rates are:
Durable goods orders
New home sales
United States Trade Balance
Weekly Unemployment Benefit
The US Federal Reserve’s speech to Congress
The main economic indicators that can affect bond markets with associated volatility are:
Now perhaps I have reached the idea that I want there is that there are many forces working to determine what should be the interest rate on a given day such as The Infinity APP. So when you ask a loan customer, “How are interest rates going today?” You’ll see that there are a lot of things behind that.
Almost all forex traders rely on analysis when creating their trading strategies. There are two main types of forex analysis – technical and fundamental. This article will focus on basic analysis and how to use it in Profit Ball Forex trading.
Basic analysis refers to political and economic conditions that may affect currency rates. Forex traders using fundamental analysis rely on news reports when collecting information on unemployment rates, economic policies, inflation and growth rates.
Fundamental analysis is often used to obtain an overview of currency movements by creating a comprehensive picture of the economic conditions affecting a currency. Most traders rely on fundamental analysis to determine the timing of entry and exit from the market and also to complete their vision of the market, some of which were formed from the fundamental analysis.
Forex rates in the Forex market are affected by supply and demand forces which in turn are affected by economic conditions. There are two economic factors that mainly affect the presentation and demand of currencies, interest rates and the strength of the economy. The strength of the economy is affected by GDP, foreign investment and trade balance.
There are various indicators issued by governments and academic institutions. There are reliable measures to determine the degree of economic recovery of a given country and are often followed by all sectors of the investment market. Indices are often issued monthly, but some are published weekly.
Two key indicators are interest rates and international trade. Indices also include consumer price index (CPI) durable goods orders, producer price index (PPI), purchasing PMI (PMI) and retail sales.
Interest rates – Interest rates may have a positive or negative impact on the currency rate. High interest rates attract foreign investment, which is supported by the local currency. On the other hand, stock market investors usually react to higher interest rates by selling their shares because they believe that rising borrowing costs will negatively impact corporate performance. In some cases, equity investors may sell their shares heavily, which may cause the stock market to contract, but the national economy itself. Determine which of these effects will have the upper hand on the price of the currency depends on many factors and complex, but there is often a consensus in Opinions among observers of the economic situation on how a change in interest rates will affect the economy and the currency.
International trade – The Profit Ball trade balance, which shows deficits (imports larger than exports) is usually one of the indicators that is not favored. Trade Balance Deficit means a flow of funds abroad to buy foreign goods, which may affect the devaluation of the currency. Nevertheless, market expectations usually determine whether the trade balance deficit is unfavorable. If a country faces a constant trade deficit, this factor can be assumed to be already priced when the currency is valued. Then the trade deficit will affect the currency prices only if it comes above market expectations.
Other CPI indicators include the cost of living index and PPI – the cost scale of commodity production. GDP measures the total value of all goods and services produced in a country. M2 Money supply calculates the total money supply of a particular currency.
There are 28 major indexes used in the United States. These indicators usually have a strong impact on financial markets, so forex traders should consider them when designing their trading strategies. The latest information and news are usually available on a number of websites and Forex brokers usually provide this information to their customers as part of their business.
How to Earn with Carry Trade
Curry Trading (The Carry Trade) is one of the most famous strategies in currency trading. As they offer the bonus without requiring anything on your part – as long as the fluctuations in the market are absent. Given the volatility of the currency market, especially after the outbreak of the global financial crisis in 2008, the curry has seen a significant drop in forex trading and the reluctance of many forex traders. However, during the bright spots and times of optimism in the past two years, Kari has been relatively active. .
What curry do you want?
Curry’s strategy simply means that the trader in which the forex trader tries to make money through interest rate differentials, it is known that central banks in all the world are setting interest rates, and here the trader benefits from the difference in the currency. In Curry you can use the leverage and borrow in a low-interest currency to finance the purchase of high-interest currencies. This means in Forex trading, opening a position on a currency pair, where the interest rate is high.
One of the most popular pairs of Curry trades is AUD / JPY. Because Australia’s currency has relatively high interest rates, compared to other developed countries. On the other hand, Japan offers a low interest rate. Already counted, the lowest among major currencies. If you use leverage in the Forex trade to enter positions on the AUD / JPY and hold overnight trading position, you can earn profit and earn money from the difference between the existing interest rate between the two currencies – you can raise the profit cap by maximizing the trading position Using leverage.
When will the curry want more effective ??
For a curry deal to work effectively, high-interest currencies need to make gains, or at least remain constant, in comparison to the low-interest currency. Therefore, in order for the AUD / JPY to trade successfully, the Australian dollar must make gains against the yen or keep the exchange rate steady. In fact, in order to achieve a curry deal you want results in your favor, you do not need to earn anything on your capital center. In our AUD / JPY example, the AUD does not need to make gains against the JPY. The destination earn money on interest teams, so capital gains are not important (but can be an extra bonus).
As long as the high interest rate currency continues to maintain the same price, here you can say that you can profit from curries as long as the interest rate does not drop dramatically against the low interest rate. (In this example, if the yen is rising against the Australian dollar, the capital losses from your long term trading position are likely to overshadow the interest income from the difference). In the past, some individuals and investment institutions were known to maintain a curry deal for several months – or even years. As long as the special part of the high-interest currency pair is rising or maintaining its high, as long as the interest rate remains high, Profit Ball can continue to profit from the difference.
Curry deals want to work well during low volatility periods. Where currencies in periods of low volatility tend to continue to move in a certain direction. In addition, in times of strong economic growth and low volatility, it is easier to maintain the direction of price action. Moreover, the interest rate is likely to rise when economic activity is positive. Japan’s interest rate has been down for a long time as an attempt to stimulate the country’s economy. However, in Australia, growth was large enough as interest rates were raised to rein in inflation. This dynamism resulted in a huge (predictable) price difference in which profits were easily made.
Volatility: The enemy of curry you want
Given the quality of the low volatility environment with the curry trade you want, where it is fairly easy to see where things are going, you can understand the problem of market volatility. It is hard to say that news from the news will want to market in another direction. The current environment is difficult, as you may try to trade AUD / JPY and find that risk aversion has made traders suddenly push the yen upwards – thus spoiling the benefit from profit on interest rates.
Another issue is that central banks may cut interest rates during difficult economic times. Australia has seen interest rate cuts since the financial crisis, reducing the difference between the Australian dollar and the Japanese yen, making curries want less profit. (Given leverage overlap, any change can make a big difference to the end result.)
Although there is some hope for the return of the curry and wants a better and better return. It is a very simple and direct way to earn money in the currency market, so it is no surprise that you find that curries want to become familiar and common among Forex traders.
Often, all Forex trading platforms have the same amenities as other platforms, but opinions are multiple, and objective standards can make a real difference. Operating, speed, user interface, tools and security will be the best choice among trading platforms. However, we should note that the concept of trading is all about making the right decisions in a timely manner, and this is the way and place available to online traders. Through the online trading application, you can easily fill in commands without installing any software.
Today we will take a look at the 3 most interesting trading platforms available for your browser.
Web version of the MetaTrader 4 platform
The web version of MT4 is a 1K Daily Profit online platform to access your MetaTrader trading account in real time via a web browser. The new version of the platform Metatrader 4 platform was waiting for many lovers of trading. Let us see together whether the functions and features match expectations.
MetaTrader 4 MetaTrader 4 is known as a reliable and convenient trading platform. Thanks to its operational functionality, it has become one of the most popular platforms among experienced traders. Modern technology, rich functionality and a simple user interface allow transactions to be performed on the basis of technical and fundamental analysis of the market. But the current Web version on the Internet has excluded many old conveniences as it is in its initial version.
User interface – The MT4 web version contains an intuitive interface with some differences from the usual platform that you may be familiar with. The graph loads very quickly and does not require much data traffic. You will not have any problems when trading where the terminal works on the Internet without any errors.
What does it contain? – Those who have had to deal with the web version of the usual MT4 may find it completely empty. For example, you can use only 5 basic indicators: moving average, envelopes, Bollinger Bands, Momentum, and MACD. Fibonacci lines also included. However, MT4, for example, contains more than 50 technical indicators and the ability to customize your indicators, which are the built-in downloadable options in the MT4 platform, we can assume some resentment by MT4 enthusiasts. However, developers promised to add other technical indicators in the future.
The positive impression comes from having 3 options for the chart such as Japanese candlesticks, columns, and broken line. You will also have 9 time frames for accurate analysis. On the platform, you will find current market prices, trading currencies (from major pairs to exotic currencies), commodities, indices, CFDs, and Betcuen. In order to resume all of the above, we will separate the pros and cons:
Advantages of MT4 Web Station Version
A “Market Watch” window has a set of asset classes that are easy to search for
“Click & Trade” option Market orders are executed through one or two mouse clicks
Ability to trade directly from the chart
A large number of financial instruments, although this depends on the trading broker
Easy to use intuitive design
Graphs of different time periods
Although it has many operational functions, it still needs some modification and change
There are a few technical indicators making them limited
Do not support trading advisors
You can not change interface settings
CTrader Web Station
CTrader Web Station is one of the latest technologies in online trading. 1K Daily Profit Designed to work with ECN-Accounts and combine sophisticated tools and features that meet the needs of both beginners and professionals from forex traders.
The options for the graph you’ll find on top of each chart are very intuitive. Which. :
6 levels of zoom option to see the deep and clear.
Chart templates option
The time frame option includes 14 different time frames
Option Chart type with 5 types of charts: Columns, Candles, HLC Diagram, Line, Hechi and Ashi.
In the middle of the drawing you will find the purchase and sale buttons and the size of the deal.
Indicators on the graph can be added by clicking the cursor menu. It is organized by gender and has sub-lists.
Use color settings where you can change the color of the graph and save it on your template templates templates.
The last graph mark at the top of the graph shows the list of things used, which shows you a list of all the things and indicators currently in use.
One of the useful tools is the Quick Transaction option. The Quick Transaction option is the setting that leads you to market orders with one or two clicks. Quick transaction settings are located at the top left of the platform in Quick Toolbar Options. The quick transaction is disabled by default, which means that clicking Buy or Sell will open the Market System window where you can confirm the status you wish to enter. After activating one-click mode, you can enter an order easily by choosing a size from the Market Watch window and then clicking Buy or Sell.
Chart Method – cTrader has many graph modes designed to meet different trading needs and market view. More precisely, there are 3 buttons to place the chart on the object toolbar:
1) Style Chart Multiplayer mode displays the multiple chart all open drawings in a fixed layout on the screen. You can swap graph positions by clicking and dragging from the upper left corner on any chart, but you can not change the graph sizes.
2) The one graph method works to expand the chart to fill the entire chart space on the platform. Then you can see the entire screen in each chart using the tabs at the top.
3) Free Chart Method All charts appear on a screen such as multiple chart mode, but you can resize them (as shown in the picture below).
ECN real price differences
Level II pricing – – Full market depth
Multiple command types
Charts and advanced technical analysis
You can trade reverse market without entering into the transaction
A wide range of trading tools (83 pairs of currencies in Forex, Metals)
More than 50 indicators with the possibility of combining them for optimal utilization, as well as the development of your own indicators
Quick access to the most traded instruments
It is very difficult to find flaws in cTrader Web, but for objectivity we can say that this platform has many characteristics. If you are a beginner, you may be overwhelmed by traffic jams, objects, buttons and other bells and whistles. In this way it may be difficult for you to actually focus on trading and graph analysis.
Web version of UTIP
UTIP is a relatively new web platform and is a great alternative to everything you’ve seen above. Beginners in Forex can enjoy their great advantages because they are simple and intuitive. Unlike MT4 Web, the web version of UTIP comes with a toolbar on the right side, making it easy to access. UTIP has a powerful technical analysis capability, a beautiful design and an easy to use interface.
FOREX and Binary Options – UTIP is fully integrated into both Forex and FX and binary options. Trading in the same terminal is done on a single trading account. Both markets have the same tools and functions as arbicash.
User Interface – The platform has buttons conveniently positioned so that the trader can access any feature through the main window. This allows the trader to perform operations quickly when opening and closing positions, changing current trading positions, viewing reports, and more. Shortcut keys are great for speculators who can not enjoy such convenience with MT4.
Design – Modern dark colors look good on personal computers as well as on laptops, tablets, mobile devices. The dark design is not only stylish and trendy, but also comfortable. The bright color scheme is also available. It is suitable for traders with conservative views.
Technical Analysis – A complete set of technical analysis tools with multiple functions that meet the needs of any professional dealer. UTIP is the only port for the least time frame which is 5 seconds, maximum one year, which is a great advantage against MT4 or cTrader
Indicators – With UTIP, there is a large group (over 30). You can find indicators arranged in groups, and can be customized to meet individual needs. If you wish, you can add your cursor.
The terminal also has a drawing feature on the graph. It consists of 29 drawing elements. Including: fonts, channels, and other symbols. Giving greater freedom to the trader.
Disadvantages of UTIP
Although this platform is great for beginners, there are a few weaknesses:
Do not support automated trading
Lack of number of dedicated indicators
Few supported by trading brokers
There are few available third party trading platforms and it is often difficult to find the most appropriate. While MetaTrader 4 is a viable alternative as it is available, it is advisable to take a look at the alternative UTIP provider where it can offer more features. If you are an advanced trader, cTrader can be a very important option.
The Forex market is the so-called foreign exchange market, where the exchange of currencies on a daily basis. There are five major Forex market centers in the world: New York, London, Tokyo, Frankfurt and Zurich. One is not required to be in the trading room so that he can engage in the Forex market. Today, Forex trading can be done from home and using a personal computer.
The Forex market itself is basically a global connection between traders who make investment moves based on the price of the currencies or their value relative to other currencies. These traders constantly negotiate prices with other traders, resulting in fluctuations or movements in the currency. The value of the currency in the Forex market also relates to the offer. If there is a big demand for the euro, for example, this would mean a lack of supply in the forex market, which means that the euro will become more valuable compared to the US dollar, for example. In turn, the position in the Forex market will be as follows, is that the euro will generate more dollars, and later this will weaken the dollar as well. Hydra APP of Forex market volatility allows investors to make predictions about how a currency moves to another currency. They can make these predictions and then buy and sell on them.
While some people view the Forex market as a place to learn about exchange rates when they travel abroad, others are seen as an opportunity to make big gains in their financial plans and in the future.
Does High Frequency Trading Affect Forex Traders?
The short answer to the title of this article is: Yes. However, I’m not sure if you really understand the rules of this game.
Perhaps everyone has seen in documentaries that show on television one of the big punks or a giant shark as he swims while a few small fish hover around him, waiting nearby to get some crumbs when the giant feeds on a big fish. However, these small fish may themselves become part of the shark at some point. When it comes to foreign exchange trading, individual traders may also become an easy meal for Forex traders. In fact, if they decide to enter the world of high-density trades such as Hydra APP, they may swim in dangerous waters.
Trading is mainly based on information processing, both inbound and outbound. In the 19th century, renowned banking investor Baron Rothschild was asked why he could always invest in the right companies and the right time. His answer was simply: “pigeon-pigeon”. In fact, men were able to get information faster and more widely than others. Well, this was using 19th century technology. Let us now turn to the twentieth century. I remember that when I was trading in physical goods, I had to make long distance calls or even send telegrams and then wait for several hours to get some important trading information. In today’s world, pigeons become digitally digitized and fly at the speed of light.
High-density trading strategies usually involve opening and holding positions for very short periods, sometimes up to a few seconds. Computers dedicated to this type of trading are directly connected to the market to receive data flow and execute orders as they are associated with the credit lines of major banks. The expenses of these transactions are negotiated, and the difference between bid prices and the question is less than any individual trader can find. Of course, such a very fast trading pattern is only appropriate for major players in financial markets such as mutual funds and institutional traders.
The next data is processed and analyzed and transactions executed via high-speed computers. Believe it or not, these logarithms collect data from thousands of sources, then identify keywords and infer probabilities in short periods measured in microseconds. Even if the individual trader receives the same data at the same time, the HFT computers have absorbed the news, selected the trading center, executed and closed the deal, making small profits even before the retail investor has read the same information. Behind these logarithms lie some of the best minds in this world – physicists in particular – and specialists in new and sophisticated probabilistic models. In fact, I can say that we are in the era of space trading.
Needless to say, huge investments are required in the infrastructure to develop special trading logarithms, provide high-speed computers, access market access and execute transactions as quickly as possible. But it may not be as bad as it may seem at first sight. We can even go away and say that traders who apply high-density trading patterns are very similar to market makers and other stock market specialists. Where they provide liquidity and volatility – both good for all traders, large and small alike. However, playing with them is not a good idea for small larvae.
Thus, the best strategy for individual Forex traders is Hydra APP to stay in a clear area and use a different strategy. In order to compete you must have some advantage, so retailers should not try to compete with their high-density counterparts. That’s why they have to play their own game where they have some advantage. There are many other strategies that an individual investor can use with every success. And do not worry about what is called market manipulation because the Forex market is so big that it’s hard for someone or someone to manipulate it and there’s a lot of crumbs for everyone. You should never think of competing with the big scalings unless you have the affordability of infrastructure and bank credit lines to be able to play this game.
Definition of interest rates: Interest rates represent the rate of the Libertoes as well as additional spreads depending on the complexity of the transaction and the risk profile for the applicant.
Forex or the TeraAPP Forex market is linked in all its aspects with money. All countries’ currencies are sold, bought and traded. In the Forex market, anyone can buy or sell the currency they want with the opportunity to exit the market at any time they want. When dealing with the foreign exchange market, one can buy one currency against another and then sell it for profit. For example, a speculator can buy the Japanese yen when it starts to rise against the US dollar and when it sells the yen later and repurchases the US dollars, it gains some profit.
The Forex market, also known as the Forex market, is influenced by a large number of factors. The market itself has become one of the most popular forms of trade tools for the time being. It has been thought that this market is limited to the wealthy, but with the minimum necessary to start trading continuously; This market is available to all people and from various financial levels. The two most attractive things in this market are leverage and liquidity. Most people who have a large background in the Forex system know that they can use a small amount of money to work and convert them into larger quantities using the Forex market. However, when you start working in the Forex market, you have to be aware of all the things that affect this market. Knowing everything that goes on in this world in detail is an integral part of the logical and rational trading process.
Interest rates are one of the things that move the Forex market. While the price of the currency remains the main focus of this market, interest rates also have a direct impact on these prices. Therefore, in order to be able to understand the foreign exchange market, it must understand the current circumstances of each interest rate separately. While economic and political conditions are also among the things that have a big impact on the Forex market, nothing moves this market more than interest rates do. Sometimes we should remember that money usually follows interest rates. When the interest rate of a currency rises, investors will have a desire to get bigger returns and then we can see the money flowing into the currency of that country. When interest rates rise in one country, this makes their currency stronger against other currencies. The logical explanation for this seems simple: investors are always looking for a currency that gives them higher returns and profits than others. Finally, high interest rates are beneficial to any currency and its decline is a negative for the currency.
Government participation in the Forex market is not uncommon. Sometimes governments may sink the foreign exchange market in their local currency. Although this may seem silly by those who do not know anything about the Forex market, those with a background in the field and who know it well can understand it quite well. When governments sink the forex market with their local currencies, they aim to devalue the currency. When they buy their local currency, this means they want to raise their value. Some may know that this strategy is called central bank intervention. Governments do this to help their macro-economy, which in turn contributes to keeping the forex market strong and stable because when Lake has these big players who create the necessary features to keep everything as fair as possible, this makes the market attractive.
Tera APP is true that interest rates can move the market for a short time, but the normal foreign exchange market makes it difficult to imagine the continuation of this effect for a long period of time. The design of the market itself, which is large in size, restricts interest rates from having full control over the movement of this market. Nevertheless, many times experts are trying to predict the timing of raising or lowering interest rates. One of the most common things to keep in close monitoring of interest rate expectations is to follow the performance of economic indicators such as inflation and others. In some cases, experts and investors also listen to politicians and people with economic influence. Where they can gather separate evidence but help them build correct guesses before announcing interest rate changes. For the most part, there are only a few simple signs before the interest rate announcement is announced.
As you can see, the impact of interest rates in the foreign exchange market is strong. Interest rates help determine which currencies are the strongest, although this is, of course, relatively relative to other currencies traded at the same time. When you think about interest rate hikes and declines, you can always remember that with low interest rates, this is good for both investors and the local currency. When interest rates fall, it is not as good as they seem. When interest rates remain low for a long period of time, the market looks a little boring. However, the great thing about the Forex market is that when the government intervenes, which happens frequently these days, there is always hope for some improvement. So if you’re just starting to learn how to trade in the Forex market, you should not forget to pay attention to following up on interest rate hikes and falls around you so you have the ability to make the best possible investment decisions.
Currency Correlation and How to Use It?
Currency is priced in pairs, although no currency pair moves in isolation from the movement of other currency pairs. This makes it necessary to understand the relationships between currencies.
For example, if the currency pair “A” moves in the same direction as the currency pair “B”, let’s assume that we are closely following the currency pair movement. If we expect the currency to rise and then buy it but since we do not follow the B currency closely, if it happened suddenly and looked at the technical or fundamental analysis and we received a signal that the pair will start to retreat and accordingly we sold this pair. What will happen in the end is that we will end the trade on a profit from a pair and also on a loss for the other pair because both are going in the same direction. A similar situation may occur if we buy or sell two other currencies at a time when there is an inverse relation between them that makes each move in the opposite direction to the other direction.
Once we recognize the quality of these relationships and the extent of their change over time, we can benefit from this advantage to control the degree of exposure of our investment portfolio.
The correlation coefficient is between -1 and + 1.
The + 1 sign means that my currency pair will move 100% in the same direction all the time. The correlation-1 means that my husband’s currency will move in opposite directions 100% all the time. The zero correlation means that the relationship between the two pairs of currency is completely random.
If the correlation coefficient is positive but less than +1, this means that the currency pairs are moving in the same direction but not at all times. If this positive value is close to + 1, this means that both currency pairs will move in the same direction at most times.
If the correlation coefficient is a negative value but less – 1 this means that my currency pair will move in opposite directions but not all the time. If the correlation coefficient is close to -1, this means that the currency pairs are moving in opposite directions in most cases.
So how can you take advantage of the relationship between currencies during forex trading? Well if your speed is increasing or decreasing on the highway due to traffic congestion at times, this will not really reflect the average speed at which you can finish the way you go each time you use Tera APP. The correlation between currencies is dynamic and may change at any moment. Learn about the relationship over the last few days and then compare it with the degree of long term relationship, say for example last year. If the correlation coefficient in the short term is significantly different than in the long term, this may give you the opportunity to trade … but how? Let’s assume, for example, that the coefficient of correlation between currency pairs A and B of 0.98 last year. This means that both spouses move in the same direction most of the time. As the pair moves to the upside, the pair B is also moving towards the same high speed, but suddenly we noticed that during the week or last month the correlation coefficient between the currency pairs has become 0.10, meaning that both are moving in the same direction but at different speeds. For example, say two cars are moving toward the same destination, but one is running at 100 mph while the other is running at 10 mph. But we can assume that in the end both cars will have to walk fast one. So what do we do? Well we’ll see either of them walk slower and take it.
When we convert this example into currency trading, I assume that my currency pair is moving in the same direction, which was 0.60 over the long term but suddenly this relationship has dropped to 0.20 in the past few days. In this case, we will see who is moving slower and then buy it on the assumption that it will soon hit the other. On the other hand, the other currency pair can be sold if conditions change.