There are several external factors that
affect currency trading. These factors include trade reports, GDP,
unemployment, international trade, manufacturing etc. The growth or decline in
these factors affects a countrys currency value.
Foreign exchange is a continuous global
market, providing a 24-hour market access to its players. Since it is open only
5 days a week, so weekend is the closing period. Although foreign exchange is
the most liquid of all markets, the fact that it is an international market and
trading 24-hours a day, the time of day can have a direct impact on the
liquidity available for trading a particular currency.
The major centers and time zones are that
of Sydney, Tokyo,
London, and New York. Therefore, forex alerts must
consider which players are in the market, since in the modern interconnected
financial world, events that occur at any hour, in any part of the globe, can
affect some or all parts of the investment community.
In trading, you are not ignorant
like one remains in stock for a considerable period of time about the news
affecting the liquidity of a stock. In stock market, you come to know about
inside trading, revision in earnings only after the market has reacted upon it.
But in currency trading,
this is not the case. Here you get various forex signals. Significant information
affecting a particular currency becomes known to everyone in the trade
instantaneously. There isnt anything as insider trading
in a market.
There are many online forex
trading startegy sites. They all maintain a global economic calendar.
This calendar indicates the major forthcoming economic, financial and business
related events all over the world and which can have important bearing on
foreign exchange market. What you have to do is to keep a track of all
important events and news.
Certainly, it will not be an easy task to
watch constantly all the factors affecting foreign exchange trading market.
They change in importance over time and condition. But the information is
available to anyone and for use to ones benefit. A currency trader has got a
chance to react immediately to any new information.
Unlike stock market, another important
advantage trading offers is that you can do foreign currency trading
almost from anywhere from the world. There are so many online forex
trading signal platforms available to get instant information and to
act within time.
Most important GDP figures that affect
forex trading are of USA, Japan, Canada,
Australia and Britain. China is also
expected to be a major force in online paper trading in near future.
Central banks play a significant role in
the forex market because they have
the responsibility of changing the countrys base interest rate. A central
bank has to maintain growth in the economy in accordance with inflation, so it
creates a good balance in interest rates. The banks decisions on whether to
raise, cut, or hold the interest rate fuels speculation in the market,
where the value of a currency, or group of currencies, changes in real time.
Natural disasters, terrorist attacks, and militarily actions in a sensitive
region can have a significant impact on the market as they create a
disturbance in the world.
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