Profitable Currency traders commit to keeping up with the latest economic calendar and putting two and two together to understand why the price is moving. Sure we can all take a quick look at a set of charts and see that price has moved higher or lower but there will be a valid fundamental reason as to why traders have bought the currency up or sold it off. I believe that knowing why the price is moving is an essential ingredient to winning big. There are occasions throughout the year that currencies trend big and they will be trending because of an economic fundamental reason usually associated with a Central Bank. Here are some quick tips to learning how to follow why the price is moving.
- Each day check the economic calendar to see what high impacting news is coming. There are dozens of websites to get this info from and we have set up this page for our clients which you are welcome to use. A currency will be bought or sold after the news is released if the economic news is out of line with expectations.
- When you see a currency price has moved sharply take the time to find out why. A good place to do this daily is www.cnbc.com or www.bloomberg.com and just click on the FX news link and you will be able to find out why a currency has moved.
- Currencies trend big when investment banks and hedge funds anticipate a central bank is going to adjust interest rates or monetary policy program. This usually starts to happen 9 to 12 months before the actual interest rate or policy adjustment officially takes place.
It’s not difficult to understand why Currency Prices are moving but when you get into a routine of figuring out the major themes you’ll appreciate why a trend is developing. This can give you the confidence to stay in a trade and increase your profit.
One trade at a time. Go get ’em!
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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