Money on currency exchange involves doing a fundamental analysis of elements that will have an influence on the foreign exchange market. Forex Day traders, or short-term traders based their currency bargaining strategies on the economic versions of the week. By all means, it is a good strategy to follow and follow a successful method for following many traders, but it is important to focus on macro- facing events that have an underlying effect on the economy or The global society.
The importance of macroeconomic events in foreign currency trade
Macroeconomic events have a major impact on the fundamental economy and price change can change price, not just 1 or 2 days, but months and years to come. Events such as wars, major international gatherings, natural disasters are so powerful to their abnormalities that they can change the money exchange market in a physical and psychological manner. These events can significantly change the exchange rate in the same way. The exchange rate will decrease or increase value. It is therefore important to be up to date with what is happening in global development, understand the position underlying market view before and after these events. What to expect from them can be very profitable or at least prevent you from losing money.
Here are some events to treat:
Elections for the President
Meetings G7 or G8
Major events of the central bank
Debt defect by main currencies
Changes to currency regimes
Risk reversals are a fundamental exchange rate exchange strategy
Risk reversals are one of the many fundamental tools to use for indicators in money exchanges. One of the weak points of foreign currency exchange is the lack of high volume data and precise signals for the feeling of gauging. The commitments of traders report by the FCFTC Futures Futures Trading (FCFTC) are available for everyone, but is released with a period of 3 days. Another useful source is to use the risk reversals available on LIVE at any time at FXCM.
Risk reversals contain a pair of options, a call called Call and put on the same currency. Reversal of risks The same purpose and the same capacity at the frequency of fundamental points. The same expiration and strike price should logically have the same implicit unpredictability, but it is not the same thing in reality. The feeling is integrated with price variation, which makes the risk of reversal an excellent tool for measuring the feeling of the market.
Optional options: a useful strategy in exchange rate movements
Option volatilities are a very useful strategy for time movements in the Forex system for professional hedging funds. Implicit volatility is a measurement based on past price change Calculate change over a given period of a currency. Normally, this is calculated the annual regular variation of daily price changes. Future prices are therefore used to find implicit volatility, used to develop premium options. This seems very complicated, but the options of options essentially options calculate the report and the rate of a specific currency price over time based on historical changes.