The Different Factors that Effect Forex Trading | ASXnewbie.com
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The Different Factors that Effect Forex Trading.

In the world of Forex  there are several external factors that you need to be aware of before you begin to trade in the Forex currency market.

A number of factors that you need to take particular notice of are such events such as trade reports, GDP figures,  the unemployment and international trade statistics, manufacturing etc. For the growth or decline in any of these factors  will impacts upon a country’s currency value.

Taking into consideration that Forex is the most liquid of all  the markets, the fact remains that being an international market and trading 24-hours a day, the actual time of day can have a direct affect on the liquidity available when  trading a specific currency.

You would be aware that the major centres and time zones are that of Sydney, Tokyo, London, and New York. Therefore any events, such as those mentioned above, that might occur at any hour, in any part of the world, can and will affect some or all parts of the forex trading community at some stage or other.

In the stock market, you might of heard about inside trading, revision in earnings, usually only after the market has already reacted upon the news. But wth forex currency trading, this is exactly the opposite for when you get several forex signals with  important data which affects a specific currency  the fact becomes known to everyone in the Forex market instantly. You don’ have anything that resembles insider trading in the forex market.

There are numerous online forex trading startegy sites to be found on the internet and they all maintain a worldwide economic calendar to some degree. These calendars indicates the major approaching economic, financial related events which are going  occur sometime in the near future. All of which will have important bearing on how the various currencies will react in the Forex market.

All you have to do is to keep a track of all important events and news as they happen.

In is definitely not an an easy task  keeping up to date with all the constantly changing factors that are affecting the Forex market at any given time. But this information is available to all and sundry and can be put to good use to one’s trading benefit. Fore armed with this information a Forex trader has got at least a fighting chance to react instantly to any new information that comes to hand.

The most important GDP figures that  can and do affect forex trading are those of USA, Japan, Canada, Australia and Britain.

All of the Central banks also play a substantial role in the forex market’s daily trading activities. This is  because they have the responsibility of changing their country’s “base” interest rate depending on the economic climate they are currently experiencing..

When a  bank is making a  decision on whether to raise, cut, or hold the interest rate. this automatically  fuels speculation in the forex market. Where the value of a currency, or a group of currencies is alway changing in real time, any  natural disasters, terrorist attacks, militarily actions and the like  in a sensitive region can also have a significant impact on the forex market as they create a disturbance in the world at large.

All in all, there are numerous factors involved which can and will affect which way the Forex market reacts. The trick here is to keep a watchful eye open at all of the upcoming events which you know will have an effect on the currency you are currently trading in. Having this knowledge will assist you to become a more profitable Forex trader.

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I wish you profitable trading.  :-)