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Forex fundamentals news develop an edgeForex Fundamentals Course. 8 On Demand Lessons PLUS 2 Months of Live Coaching AND Live Trading. Our Forex Fundamentals Course Contains. ALL the Ingredients For Trading Successfully in One Short, Simple Battle Tested Trading Course. Improve Your Trading in Eight Simple Lessons Followed by. 2 Months OF LIVE COACHING. Kathy and Boris will Answer your Questions & TRADE the Course Strategies in LIVE Markets. In the 10+ years that we have been trading together we have survived through some of the most volatile markets in history and learned many lessons that we would like to share with you. We’ve distilled that hard won knowledge into a simple, effective online course that will show you how to use Fundamentals to Conquer the Currency Market. Most traders realize that economic and geo-political news controls currency markets – but amidst the daily deluge of data, few traders have the skill or the patience to separate the signal from the noise in order to construct intelligent, professional trades. Our course allows you to skip the tedious, trial and error approach and quickly learn what it takes to make professional currency trades. In eight short and simple lessons we will teach you what you need to know about trading fundamentals. No useless fluff. No boring academic complexity. Just solid, practical knowledge that traders can put to their advantage in the market every single day. In addition to Fundamentals, we will show you how we develop Trading Strategies, share our latest models, and show you proper trading plans and money management techniques to give you an A to Z understanding of what it takes to trade the currency market. 3 On Demand Lessons Per Week PLUS 2 Months of LIVE COACHING and TRADING. After you’ve completed the 8 on-demand videos we will invite you to our Live Coaching sessions where we will answer questions and show you how to apply EVERYTHING we taught you online in LIVE Market conditions trading using our own REAL MONEY accounts.

You’ll get to watch us put on trades in real market conditions and learn to trade FX the BK way. Here’s what you will Learn: Lesson #1 -- An Easy Guide to Understanding the Global Economy -- Macroeconomics for Traders. + What is Economics and Why Should You Care? + What are the 3 Ms of the Forex market that Drive Most Currency Movements? + How You Can Filter Daily Economic News to a Few Key Powerful Facts to Help Guide Your Trades. Lesson #2 -- The Fundamentals that REALLY Move Markets -- Everything from Central Bank Intervention to Fixings to Fair Value of Currencies. + Everything you Need to Know about High Beta (Risk) vs. Safe Haven Currencies + Learn How to take Advantage of Central Bank Interventions + Learn why Daily Fixings can Affect Your trades and What You Can Do About it. Lesson #3 -- How to Predict Economic Data Like a Wall Street Pro. + Top 10 Most Important Monthly Reports Every Currency Trader Should Know + Learn to Forecast Data just Like a Wall Street Economist + Learn which Economic Reports may predict Employment, GDP and Retail Sales reports for all the Major Currency Pairs + Learn the Edge to Anticipate News. Lesson #4 -- Peek Over Our Shoulders -- A Private Tour of Our Trading Screens + Shortcut to all the Key Resources every Currency Trader Needs at His Her Fingertips + Find out How to get Real Time Economic Data for FREE + The Best Charting Software Packages to Track the Market. Lesson #5 -- How to Trade the EUR, USD, GBP, JPY + Why is EURUSD different from all other pairs? + How can you profit from GBPUSD volatility? + What Makes USDJPY Tick. Lesson $6 -- How to Trade the AUD, NZD, CAD, CHF. + What are the best hours to trade AUDUSD? + Why is the Canadian dollar no longer an oil play? + What single event could force the Swiss franc to break its peg? Lesson #7 -- How to Turn Economic Data into Currency Trades.

+ Learn how to position for big moves by trading news proactively + Learn how look for small, steady setups by trading news reactively + Learn a step-by-step news day trading system that aims for 4 out of 5 winning trades. Lesson #8 -- Proper Money Management Rules To Protect Your Account + Learn the single biggest mistake all forex traders make and how you can try to avoid it + What are the hidden risks of trading Forex and what can you do to protect yourself + How to make risk control an automatic part of every trade you place. PUTTING IT ALL TOGETHER. + How to develop a Professional Trading Plan with a Top Down Approach + How to fuse Fundamentals, Technicals and Sentiment to time the trade. + How to manage the trade for maximum profit potential. Trading forex carries a high level of risk and may not be suitable for all investors. 3 On Demand Lessons Per Week PLUS 2 Months of LIVE COACHING and TRADING with our REAL MONEY ACCOUNT! Forex Fundamental Analysis for 2018. Using fundamental analysis to trade Forex can be very dangerous when it is not done right. Ironically, traders relying upon fundamental analysis rather than some form of technical analysis tend to lose money more quickly than if they just stuck with technical analysis. This seems strange and counter-intuitive, but it is true. In this article, I will explain why using fundamental analysis exclusively can be dangerous, then I will show how the right type of fundamental analysis can be used to make your trading better, if it is something you really want to use. I will focus on what the fundamental situation will likely be at the start of 2018. You certainly don’t need to use fundamental analysis to make money over the long-term in the Forex market, but it can help.

Why Mechanical Fundamental Strategies Perform Worse than Trend-Following Strategies. Fundamental analysis sounds like a sensible, conservative method to use to decide where to put your money. After all, if you were considering investing in a stock, you would feel good about performing due diligence on the company, checking its financial position, and being convinced that the economy was likely to grow over the time horizon of your investment. So, doesn’t it make sense to feel the same way about the country whose currency you are buying, even if your time horizon is shorter than that of a typical stock investment? Well, it’s a logical approach, but there are two immediate problems in applying this principle to Forex. Firstly, which fundamental indicators are you going to use to make your call on the fundamentals? Secondly, it seems clear that fiat national currencies are far less affected by economic fundamentals than stock markets are, so even if you pick the right variables for your analysis, they are not likely to be very useful. Currencies are not the “stock” of a nation, they are debt instruments issued by its central bank. Let’s consider some of the most popular fundamental analysis indicators which can be applied to currencies: Fair Value: you consider the relative costs of a basket of goods in two different currencies, selling the one which seems overvalued, and buying the one which seems undervalued, hoping the values will merge. It is very logical, but it simply has not worked in recent decades. It completely discounts the fact that there are good reasons why goods and services are relatively more or less expensive in different countries. Interest Rate Differential: currencies with higher interest rates tend to attract more investment, meaning speculative money should flow from currencies with lower interest rates into currencies with higher interest rates. Therefore, it should be possible to profit from buying currencies with higher rates using currencies with lower rates. An added benefit of such a fundamental strategy is that the overnight fees charged daily by your broker should be low, or even positive in your favor, as they are based upon the market’s expectation of the future rates.

The good news is that this strategy has been shown to generally produce a small positive edge. The bad news: the edge is small, and the strategy keeps you out of some great trades. It also tends to stop working during times of market turbulence. There can be strong, long-term price trends going against LIBOR rates for months without end. Furthermore, for some years now we have been living in an era of low interest rates, so the available differentials between the major global currencies are very small. Economic Growth: buy currencies with strong andor increasing GDP numbers, and sell currencies with weak andor falling GDP numbers. This sounds logical, yet there is no evidence it works as a standalone strategy. Central Banks are Key. If typical fundamental approaches are flawed, what can you do? Well, a better fundamental analysis strategy is to be aligned with the positions of the currencies’ central banks. Consider the fact that any central bank can create as much supply of their currency as they want, and reduce a lot too, as well as (usually) having the power to set the currency’s interest rate. This is a lot of power to move the price. Unfortunately, central banks don’t put up signs saying “tightening” or “relaxing”, which would make this kind of strategy an awful lot easier! Yet it is possible to follow the central bank releases yourself, which are given monthly (in most cases), and to read intelligent commentary on them, to develop an opinion.

You will probably require the intelligent commentary as even if you read the full texts of the central bank releases, unless you are very clear what you are looking for, you probably will not be able to come to a correct conclusion. Another approach which works well is to look for surprises in central bank releases. For example, at the time of writing, the Bank of Canada has just made it clear that they see a rate hike in January 2018 as less likely. This surprised the consensus, and the value of the Canadian Dollar continues to fall. It is normal for most central bank releases to move their currency, but when there is follow-though the next day instead of a reversion back to the mean, that can be a good sign that you have a fundamentals-driven price move going on which is likely to last longer. Central Banks in 2018. A good starting point for a productive program of Forex fundamental analysis is to make a list of the major central banks, in order of importance, and to summarize their attitude towards their currency. Then it makes sense to check whether there are any trends which are matching any identified divergence between central banks. It is not an exact science, and it is important to realize that there are other major fundamental factors which can come into play. An excellent example is Britain’s impending departure from the European Union, the exact terms of which are still under negotiation. As Britain’s economy is highly dependent upon the terms of its trade with the European Union, the terms of that trade are going to affect the pound, with the pound advancing on a softer Brexit and falling on a harder one. So here is my 2018 assessment of the currency stances of the important central banks (in order of importance), ranked by order of importance to the Forex market. Federal Reserve (U. S. dollar) – tightening monetary policy, but concerned about the lack of inflation, meaning inflation rate data becomes important. If inflation is higher than market expectations, the USD should tend to rise on anticipation of more and faster future rate hikes. European Central Bank (euro) – minor, very cautious tightening is possible in the shape of unwinding the balance sheet, but interest rates remain negative and inflation is almost non-existent. It is still hard to imagine rate hikes.

Bank of Japan (Japanese yen) – there is some economic growth, but it looks as if the BOJ is on autopilot as no tightening or rate hikes are expected throughout the entirety of 2018 and beyond. Inflation remains very weak. Bank of England (British pound) – there is little economic growth, but the BoE seems set on a course of further tightening of monetary policy by hikes in the rate of interest, because the rate of inflation has climbed to a relatively high 3.1% annualized rate. Without the inflation, there would probably not be any hikes happening soon. Swiss National Bank (Swiss franc) – this is a special case. As almost all major national currencies are extremely weak, the SNB maintains an extremely loose monetary policy with a negative interest rate of -0.75% to stop the Swiss Franc from appreciating as a safe-haven investment. The policy has succeeded in stabilizing the Franc, and this currency is an extremely dangerous bet. It has a strong tendency to revert to the mean and stay stable, rather as Gold has over recent years. Growth and inflation are extremely weak, so the SNB is determined to stop the currency from appreciating. Bank of Canada (Canadian dollar) – GDP and inflation have been relatively healthy, with the interest rate also at a reasonable level of 1.0%, but recent concerns about a slowing of growth have staved off the likelihood of monetary tightening happening soon. This is one to watch carefully, but we might be seeing the start of a fundamentally-driven long-term weakening in the Canadian Dollar. Reserve Bank of Australia (Australian dollar) – despite historically low interest rates, inflation and growth remain stubbornly low, and they seem to be taking a turn for the worse as poorer than expected trade data comes in. While it doesn’t look like we are going to see any weakening of policy, further tightening appears to be convincingly off the agenda. Reserve Bank of New Zealand (New Zealand dollar) – growth is relatively healthy, though the GDP is still barely 1%, and the rate of inflation is marginally higher than the relatively high interest rate. The new government seem to be determined to pursue a balancing act of avoiding any real tightening while also avoiding significant loosening. All this suggests a somewhat weak monetary policy, although the market has been impressed by the nomination of a new Governor of the RBNZ who is expected to keep managing inflation as a high priority.

Conclusion on the State of Forex Fundamentals. There is no doubt that the global picture of the advanced economies listed above is one of a generally weak monetary policy, with little divergence in terms of growth, policy, or interest rates. This points to a dull Forex market, which is what we are currently experiencing. However, it can be said that fundamentally, the U. S. dollar currently looks relatively strong, followed by the euro. Continuing weakness looks most likely in the Canadian dollar. This suggests that the most fundamentally convincing Forex trades which match the technical picture are long USDCAD, and possibly long EURCAD as well. It is crucially important to only trade fundamental conclusions you might arrive at when they are matched by the technical picture. There should be a reasonably long-term trend in the direction of the fundamentals, or at least it should be clear that the price is continually failing to move against it. This is the best way to use fundamental analysis in Forex trading. Now, this would suggest that the trades best supported by a combination of fundamental and technical factors are likely to be long USDCAD, long EURCAD, and possibly long USDJPY as well. Fundamental analysis, just like technical analysis, requires constant review of the situation, which can change from month to month, so the current picture is not guaranteed to last throughout 2018. Weekly Trading Forecast: Trade Wars and Rate Decision Keep Traders on Edge. by Ilya Spivak , Michael Boutros , David Song , Christopher Vecchio, CFA , Paul Robinson , Justin McQueen , Tyler Yell, CMT , James Stanley , Renee Mu , David Cottle. Your Forecast Is Headed to Your Inbox. But don't just read our analysis - put it to the rest.

Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk. Your demo is preloaded with ?10,000 virtual funds , which you can use to trade over 10,000 live global markets. We'll email you login details shortly. You are subscribed to Ilya Spivak. You can manage you subscriptions by following the link in the footer of each email you will receive. An error occurred submitting your form. Please try again later. Capital and FX markets held remarkably stable given the fundamental pressure filling the horizon. With trade wars steadily gaining traction, key rate decisions (Fed, ECB, BoJ) and a range of high profile event risk the week ahead; traders should keep close watch on sparks in the markets. See how retail traders are positioning in the FX majors, indices, gold and oil intraday using the DailyFX speculative positioning data on the sentiment page. The US Dollar remained on the defensive for much of last week as markets continued to revel in the de-escalation of Eurozone political risk. Haven-seeking capital flows that launched the currency to an 11-month high as governments in Rome and Madrid appeared ready to implode reversed course after both managed to muddle through (at least for now). Rumors that the ECB is getting ready to make a tweak to its QE program have spurred the Euro turnaround. The Euro will need more than rumors to keep its rebound going. Sterling is set to be dictated as key data kicks into high gear amid the backdrop of rising Brexit uncertainty.

It was another mixed week for the Japanese Yen, as the currency put in another indecision formation on the weekly chart of USDJPY. USDCAD holds near the monthly-high (1.3067) as the unexpected contraction in Canada Employment dampens bets for an imminent Bank of Canada (BoC) rate-hike, and the pair stands at risk of making a more meaningful run at the 2018-high (1.3125) especially if the Federal Open Market Committee (FOMC) delivers a hawkish rate-hike next week. The Australian Dollar has just endured something of a volatile week. The good news, perhaps, is that it may not be set for a repeat in the next seven days. The bad news, for bulls at least, is that there are few reasons to expect much more strength. The Chinese Yuan gained against the U. S. Dollar after three consecutive losses. This was largely driven by the reduced momentum in the Dollar rally. Gold prices inched higher this week with the precious metal up nearly 0.30% ahead of the New York close on Friday. The gains come amid continued strength in U. S. equity markets with the S&P 500 pressing higher for a third consecutive week. Looking ahead to next week, on Wednesday the Fed is expected to raise rates by 25 bps, and barring a major surprise on that front attention will, as per usual, be on the language and forward indications. Crude oil may have a difficult time resuming the trend that was so prevalent in the first half of the year as OPEC plans to fight sanctions and increase productions while US oil inventories showed the sharpest increase in US oil stockpiles since October 2008. DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. The Basics Of Currency Trading. The investment markets can quickly take the money of investors who believe that trading is easy.

Trading in any investment market is exceedingly difficult, but success first comes with education and practice. So, what is currency trading and is it right for you? The currency market, or forex (FX), is the largest investment market in the world, and continues to grow annually. On April 2010, the forex market reached $4 trillion in daily average turnover, an increase of 20% since 2007. In comparison, there is only $25 billion of daily volume on the New York Stock Exchange (NYSE). The market may be large, but until recently the volume came from professional traders, but as currency trading platforms have improved more retail traders have found forex to be suitable for their investment goals. How Does It Work? Currency trading is a 24-hour market that is only closed from Friday evening to Sunday evening, but the 24-hour trading sessions are misleading. There are three sessions that include the European, Asian and United States trading sessions. Although there is some overlap in the sessions, the main currencies in each market are traded mostly during those market hours. This means that certain currency pairs will have more volume during certain sessions.

Traders who stay with pairs based on the dollar will find the most volume in the U. S. trading session. Currency is traded in various sized lots. The micro lot is 1,000 units of a currency. If your account is funded in U. S. dollars, a micro lot represents $1,000 of your base currency, the dollar. A mini lot is 10,000 units of your base currency and a standard lot is 100,000 units. Pairs and Pips All currency trading is done in pairs. Unlike the stock market, where you can buy or sell a single stock, you have to buy one currency and sell another currency in the forex market. Next, nearly all currencies are priced out to the fourth decimal point. A pip or percentage in point, is the smallest increment of trade. One pip typically equals 1100 of 1%. Retail or beginning traders often trade currency in micro lots, because one pip in a micro lot represents only a 10 cents move in the price. This makes losses easier to manage if a trade doesn't produce the intended results. In a mini lot, one pip equals $1 and that same one pip in a standard lot equals $10. Some currencies move as much as 100 pips or more in a single trading session making the potential losses to the small investor much more manageable by trading in micro or mini lots.

Far Less Products The majority of the volume in currency trading is confined to only 18 currency pairs compared to the thousands of stocks that are available in the global equity markets. Although there are other traded pairs outside of the 18, the eight currencies most often traded are the U. S. dollar (USD), Canadian dollar (CAD), euro (EUR), British pound (GBP), Swiss franc (CHF), New Zealand dollar (NZD), Australian dollar (AUD) and the Japanese yen (JPY). Although nobody would say that currency trading is easy, having far less trading options makes trade and portfolio management an easier task. What Moves Currency? An increasing amount of stock traders are taking interest in the currency markets because many of the forces that move the stock market also move the currency market. One of the largest is supply and demand. When the world needs more dollars, the value of the dollar increases and when there are too many circulating, the price drops. Other factors like interest rates, new economic data from the largest countries and geopolitical tensions, are just a few of the events that may affect currency prices. The Bottom Line Much like anything in the investing market, learning about currency trading is easy but finding the winning trading strategies takes a lot of practice. Most forex brokers will allow you to open a free virtual account that allows you to trade with virtual money until you find strategies that work for you. The Forex Guide to Fundamentals, Part1: What is a Fundamental? Your Forecast Is Headed to Your Inbox. But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk. Your demo is preloaded with ?10,000 virtual funds , which you can use to trade over 10,000 live global markets. We'll email you login details shortly.

You are subscribed to Walker England. You can manage you subscriptions by following the link in the footer of each email you will receive. An error occurred submitting your form. Please try again later. Fundamentals track economic changes Traders want to buy the currency with strong fundamentals Check the economic calendar for upcoming events. Trade analysis is normally grouped into two categories, Technical and Fundamental. Normally when developing a trading strategy, traders will choose one or even a combination of both forms of analysis when developing a trading plan. While its always important to know and understand key technical levels, it is also good to know what is fundamentally driving market price. This series of articles is geared to better understating Fundamental trading, and how shifts in market data can affect market price. Today we will begin by reviewing exactly what fundamentals are and where we can find pertinent market data to make better trading decisions. What is a Fundamental. So what is a market fundamental?

A market fundamental is a piece of specific data or event that causes money to flow either in or out of an underlying asset. As a trader we attempt to find the strongest currency and pair it with a weaker one. This means when trading a fundamental strategy, we will be looking for a series of data points that makes one more attractive than the other. Knowing this, traders should be factoring in things such as employment data, inflation, interest rates and even political turmoil before buying a particular currency. If the underlying fundamental data is improving or getting stronger we have found a candidate currency to buy relative to another with poor performance. So now that you are a little more familiar with what a fundamental is, now we need to find all this data so we can make an educated trading decision. Every good fundamental trader should have access to an economic calendar. This is where we can see which data points are being released from week to week. DailyFX updates an economic calendar HERE providing insight into what day and time releases are held, along with past data and current expectations. Traders should keep an eye on the calendar at all times, as data hits or misses expectations this will ultimately change our fundamental outlook on a currency. Which Events to Track. The final question is which events we should follow. This is a fair question, because there is a slew of economic data released each week! To help make things easier, the high importance events have been marked on the economic calendar as depicted above. These are the events that our normally monitored by policy makers such as central banks and have the ability to immediately influence market price. While these events are certainly important, just watching events such as this week’s employment figures for the US may not give us an overall opinion of the market.

The key to trading fundamentals is to combine a variety of data points to then make an educated trading decision. As we continue our study of fundamentals we will take a look at the main influences on an economy and how they can mold our trading opinion. Watch the Market. As a fundamental trader, it is important to know how different events affect the valuation of a currency. To follow along with the market, make sure to sign up for a Free Forex Demo account with FXCM. This will allow you to monitor, track and trade currencies in real time. This will conclude our first look at Forex fundamentals. In our next edition, we will begin looking at capital flows and how they can affect price and our outlook on the market! ---Written by Walker England, Trading Instructor. To contact Walker, email [email protected] com . Follow me on Twitter at @WEnglandFX. To be added to Walker’s e-mail distribution list, CLICK HERE and enter in your email information.

New to the FX market? Save hours in figuring out w hat FOREX trading is all about. Take this free 20 minute “New to FX” course presented by DailyFX Education. In the course, you will learn about the basics of a FOREX transaction, what leverage is, and how to determine an appropriate amount of leverage for your trading. Register HERE to start your FOREX learning now! DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. The Forex Guide to Fundamentals. This is a discussion on The Forex Guide to Fundamentals within the Trading Systems forums, part of the Trading Forum category; Talking Points: Fundamentals tack economic changes Traders want to buy the currency with strong fundamentals Check the economic calendar for . The Forex Guide to Fundamentals. Fundamentals tack economic changes Traders want to buy the currency with strong fundamentals Check the economic calendar for upcoming events. Trade analysis is normally grouped into two categories, Technical and Fundamental. Normally when developing a trading strategy, traders will choose one or even a combination of both forms of analysis when developing a trading plan. While its always important to know and understand key technical levels, it is also good to know what is fundamentally driving market price. This series of articles is geared to better understating Fundamental trading, and how shifts in market data can affect market price. Today we will begin by reviewing exactly what fundamentals are and where we can find pertinent market data to make better trading decisions.

What is a Fundamental. So what is a market fundamental? A market fundamental is a piece of specific data or event that causes money to flow either in or out of an underlying asset. As a trader we attempt to find the strongest currency and pair it with a weaker one. This means when trading a fundamental strategy, we will be looking for a series of data points that makes one more attractive than the other. Knowing this, traders should be factoring in things such as employment data, inflation, interest rates and even political turmoil before buying a particular currency. If the underlying fundamental data is improving or getting stronger we have found a candidate currency to buy relative to another with poor performance. So now that you are a little more familiar with what a fundamental is, now we need to find all this data so we can make an educated trading decision. Every good fundamental trader should have access to an economic calendar. This is where we can see which data points are being released from week to week. Traders should keep an eye on the calendar at all times, as data hits or misses expectations this will ultimately change our fundamental outlook on a currency. Which Events to Track. The final question is which events we should follow.

This is a fair question, because there is a slew of economic data released each week! To help make things easier, the high importance events have been marked on the economic calendar as high priorityimpact. These are the events that our normally monitored by policy makers such as central banks and have the ability to immediately influence market price. While these events are certainly important, just watching events such as this week’s employment figures for the US may not give us an overall opinion of the market. The key to trading fundamentals is to combine a variety of data points to then make an educated trading decision. As we continue our study of fundamentals we will take a look at the main influences on an economy and how they can mold our trading opinion. Watch the Market. As a fundamental trader, it is important to know how different events affect the valuation of a currency. This will allow you to monitor, track and trade currencies in real time. This will conclude our first look at Forex fundamentals. In our next edition, we will begin looking at capital flows and how they can affect price and our outlook on the market! ---Written by Walker England, Trading Instructor. The Forex Guide to Fundamentals, Part 2: Capital Flows & Interest Rates. Capital flows calculates money moving in and out of a currency Economic events and interest rates all affect capital flows Carry Traders look to take advantage of interest rate differentials.

Fundamental analysis in Forex studies economic factors that cause shifts in buying and selling patterns of traders. As demand increases for a currency so does its value. Likewise as money flows out of a currency its value begins to decrease. To get a better view on how these movements affect the market, today we will analyze capital flows and interest rates. Let’s get started! What is a Capital Flow. Capital flows describes the flow of funds in to or out from a particular currency. Normally this flow is directly related to capital investments inside of a particular country. For instance, if foreign investors wanted to invest in stocks on the S&P 500, it would require Dollars to do so. This means money would flow into the USD from another currency to make the purchase. The logic from here is one of supply and demand.

If capital inflows exceed outflows that means there is a demand for countries currency. This can provide fundamental trading opportunities as for traders as prices rise to accommodate the new demand. This is also true with a net capital outflow. As there is less demand for a particular countries currency, we would expect a fundamental opportunity to place new sell orders. Interest Rates & Central Banks. Interest rates are important to capital flows. As investors, speculators, and traders in general all look to maximize their returns they tend to look towards higher yielding investments. That means countries with the highest interest rates, and best economic data tend to see their countries strengthen due to capital flows. One way to track capital flows is by monitoring economic data on the economic calendar along with central bank releases.

Central banks are charges with setting the banking rate that is associated with their currency. As this value changes, so will demand for a particular currency pair. Let’s take a look at an example of this in action. EURAUD & The Carry Trade. Below we have a monthly chart of the EURAUD. From 2009 to present, the EURAUD has declined as much as 10,839 pips! Why did this happen? The key to understanding this cart is in capital flows. At its peak during this time the central bank target rate as set by the RBA for the AUD was at 4.75%. This is considerably higher than the 1.5% associated with the Euro at its peak for the designated time frame. Traders and investors alike looking to take advantage of this yield differential were actively selling Euros while purchasing the Aussie Dollar. This allowed traders to collect rollover for holding open their position. Along the way as more traders caught on and demanded more Aussie Dollars, positions began to also gain capital appreciation as the chart began to trend lower. Traders who look specifically for this long term yield are known as carry traders and will continue to hold a currency pair as long as capital flows remain in their favor! Watch the Market. As a fundamental trader, it is important to know how different events affect the valuation of a currency.

To follow along with the market and to familiarize yourself with capital flows in Forex, make sure to sign up for a Free Forex Demo account with FXCM. This will allow you to monitor, track and trade currencies in real time. This will conclude our second look at Forex fundamentals! If you missed one of the previous editions of The Fundamental Guide to Forex, please enjoy the articles linked below. The Forex Guide to Fundamentals, Part1: What is a Fundamental? ---Written by Walker England, Trading Instructor. The Forex Guide to Fundamentals, Part3: Central Banks. Central Banks are found in most major economies around the globe A tightening of monetary policy can increase currency rates A loosening of policy can cause excess supply and a devaluation of a currency. Fundamental traders keep a watchful eye on Central Banks and the policy decisions they make. These intuitions, through changes in monetary policy, not only can affect an underlying economy but by de facto currency rates as well. Today we will continue our look at market fundamentals by examining Central Banks and how their policy decisions can affect Forex prices.

Let’s get started! Central Banks Central Banks are institutions used by nations around the globe to assist in managing their country or region with the commercial banking industry, interest rates, and currency prices. Examples of active central banks include the Federal Reserve of the United States, European Central Bank (ECB), Bank of England (BOE), Bank of Canada, and the Reserve Bank of Australia (RBA). The sphere of influence of a central bank may range from a single country such as the Reserve Bank of Australia or, represent policy created for a region or group of countries such as the ECB. Because of this, the actions of Central Banks have the ability to move markets and should be on every fundamental trader’s radar. Learn Forex: Central Banking Rates. Monetary Policy Normally, a Central Bank will use the monetary tools at their disposal to meet their designated goals. Monetary policy describes the actions taken by a central bank to control the money supply inside of its designated region. Depending on the state of the economy, the fed may select to either take an expansionary or contractionary policy, with the supply of money being influenced by two specific methods. During times of crisis or economic slowdown, central banks will normally look to expand their monetary policy. They can do this by expanding asset purchases which increases the monetary base and by also decreasing interest rates. The theory behind monetary expansionary is to make money available to banks and businesses in an attempt to increase growth and development. As a byproduct of an expansionary policy, fundamental indicators such as GDP are expected to grow and unemployment decline. As the economy heats up, the Fed will consider taking on contractionary measures. At this point, the monetary base may begin to be restricted and interest rates can begin to increase. These actions make excess investment capital scares, and place a higher premium on lending. With less capital circulating, the economy is expected to contract and slow down.

During a time of contraction, GDP is expected to decline and unemployment to contrarily increase. Learn Forex: Fed Events for March 2014. Central Banks and Forex By controlling the money supply, and interest rates, the decisions mandated by the Federal Reserve can change currency prices. If a Central bank begins a series of contractionary policies, this may increase the price of that banks underlying currency. As money and lending is tightened demand for currency will increase. When this is coupled with a lower supply of currency and increased lending requirements this can drastically increase prices. Conversely, when central banks loosen monetary policy, this can cause a depreciation of their currency. Lower interest rates can cause lending to increase at lower prices. As well expanding central bank balance sheets can create an excess supply of a currency. With a new larger supply of a currency and with demand being low this can cause prices to drop. Policy Decisions Policy decisions and economic releases from Central Banks will occur sporadically throughout the month.

The best way to track upcoming news is through the use of a good economic calendar. As these decisions are made, it is also important to track the movements of the market! You can check out the latest movements in the Forex market by registering for a Free Forex Demo account with FXCM. This way you can become comfortable with the market and the affects of Central Banks on price in real time! This will conclude the 3rd installment of the Forex Guide to Fundamentals! If you missed one of the previous editions, please enjoy the articles linked below. ---Written by Walker England, Trading Instructor. Bkforex – forex fundamentals course. Cost For You: $49. You can contact us for proof and payment details: Email email protected Skype: R8Expect (John) Bkforex – forex fundamentals course. Learn the Secrets of Trading Forex with Fundamentals & News. 8 On Demand Lessons PLUS 2 Months of Live Coaching AND Live Trading. Trading Currencies CAN Be Easy With The Proper Knowledge in Your Hands.

Our Forex Fundamentals Course Contains. ALL the Ingredients For Trading Successfully in One Short, Simple Battle Tested Trading Course. Improve Your Trading in Eight Simple Lessons Followed by. 2 Months OF LIVE COACHING. Kathy and Boris will Answer your Questions & TRADE the Course Strategies in LIVE Markets. In the 10+ years that we have been trading together we have survived through some of the most volatile markets in history and learned many lessons that we would like to share with you. We’ve distilled that hard won knowledge into a simple, effective online course that will show you how to use Fundamentals to Conquer the Currency Market. Most traders realize that economic and geo-political news controls currency markets – but amidst the daily deluge of data, few traders have the skill or the patience to separate the signal from the noise in order to construct intelligent, professional trades. Our course allows you to skip the tedious, trial and error approach and quickly learn what it takes to make professional currency trades. In eight short and simple lessons we will teach you what you need to know about trading fundamentals. No useless fluff. No boring academic complexity.

Just solid, practical knowledge that traders can put to their advantage in the market every single day. In addition to Fundamentals, we will show you how we develop Trading Strategies, share our latest models, and show you proper trading plans and money management techniques to give you an A to Z understanding of what it takes to trade the currency market. 3 On Demand Lessons Per Week PLUS 2 Months of LIVE COACHING and TRADING. After you’ve completed the 8 on-demand videos we will invite you to our Live Coaching sessions where we will answer questions and show you how to apply EVERYTHING we taught you online in LIVE Market conditions trading using our own REAL MONEY accounts. You’ll get to watch us put on trades in real market conditions and learn to trade FX the BK way. Here’s what you will Learn: Lesson #1 — An Easy Guide to Understanding the Global Economy — Macroeconomics for Traders. + What is Economics and Why Should You Care? + What are the 3 Ms of the Forex market that Drive Most Currency Movements? + How You Can Filter Daily Economic News to a Few Key Powerful Facts to Help Guide Your Trades. Lesson #2 — The Fundamentals that REALLY Move Markets — Everything from Central Bank Intervention to Fixings to Fair Value of Currencies. + Everything you Need to Know about High Beta (Risk) vs. Safe Haven Currencies + Learn How to take Advantage of Central Bank Interventions + Learn why Daily Fixings can Affect Your trades and What You Can Do About it. Lesson #3 — How to Predict Economic Data Like a Wall Street Pro. + Top 10 Most Important Monthly Reports Every Currency Trader Should Know + Learn to Forecast Data just Like a Wall Street Economist + Learn which Economic Reports may predict Employment, GDP and Retail Sales reports for all the Major Currency Pairs + Learn the Edge to Anticipate News. Lesson #4 — Peek Over Our Shoulders — A Private Tour of Our Trading Screens + Shortcut to all the Key Resources every Currency Trader Needs at His Her Fingertips + Find out How to get Real Time Economic Data for FREE + The Best Charting Software Packages to Track the Market. Lesson #5 — How to Trade the EUR, USD, GBP, JPY + Why is EURUSD different from all other pairs? + How can you profit from GBPUSD volatility? + What Makes USDJPY Tick. Lesson $6 — How to Trade the AUD, NZD, CAD, CHF. + What are the best hours to trade AUDUSD?

+ Why is the Canadian dollar no longer an oil play? + What single event could force the Swiss franc to break its peg? Lesson #7 — How to Turn Economic Data into Currency Trades. + Learn how to position for big moves by trading news proactively + Learn how look for small, steady setups by trading news reactively + Learn a step-by-step news day trading system that aims for 4 out of 5 winning trades. Lesson #8 — Proper Money Management Rules To Protect Your Account + Learn the single biggest mistake all forex traders make and how you can try to avoid it + What are the hidden risks of trading Forex and what can you do to protect yourself + How to make risk control an automatic part of every trade you place. PUTTING IT ALL TOGETHER. + How to develop a Professional Trading Plan with a Top Down Approach + How to fuse Fundamentals, Technicals and Sentiment to time the trade. + How to manage the trade for maximum profit potential. Trading forex carries a high level of risk and may not be suitable for all investors. 3 On Demand Lessons Per Week PLUS 2 Months of LIVE COACHING and TRADING with our REAL MONEY ACCOUNT! 4 Things Forex Traders Can Learn From Professional Chefs. Forex trading, much like becoming a professional chef, is a high-performance endeavor that requires skill, patience, and discipline. In a way, the forex market is like a kitchen and you’ll need the best tools you can get and your A-game each and every day in order to conquer it. After meeting with several chefs and hours and hours of watching them in action in cooking-related shows and documentaries, I have identified at least four things that forex traders can learn from professional chefs: 1. Mastery of the fundamentals. Aspiring chefs start their training by learning about basic things like the types of meat, vegetable cuts, and knife-handling techniques. After all, you can’t make the perfect beef wellington if you can’t cut your mushrooms uniformly or if you don’t know when to take the beef out of the oven. Just like chefs have to master the different methods of preparing sauces, forex traders should at least have the basic knowledge of technical, fundamental, and sentiment analyses.

Understanding different chart patterns, technical indicators, and economic correlations is key if you plan on becoming consistently profitable. How else can you distinguish a good EA from a bad one, or be confident in taking trades if you don’t know what makes the forex market tick? 2. Drive to develop their skills. Not many chefs have successfully made souffles and coq au vins on their first try. Behind every successful dish is the reality of hot, gruelling hours of practice needed to perfect the recipe. Unfortunately, a lot of trading newbies take this important step for granted. Since successful trading requires passion, patience, and practice, it is in this stage where traders-at-heart are separated from the get-rich-quick crowd. Just like a lot of chefs had to spend their early days in the hot kitchen getting shouted at and chopping onions throughout their shift, you, a forex-trader-in-training, also have to clock in hours of taking, adjusting, and backtesting trades. This is the part where you learn to treat losses as your friend and learn your trading strengths and weaknesses the hard way. Deliberate practice, trading journals, and using demo accounts help a lot in developing those much-needed skills. 3. Using more than one recipe. Chefs (and even good home cooks) know that a one-dish wonder won’t cut it. They constantly try to update and upgrade their menu depending on what’s in season, cheap, or in demand. They take note which recipes worked out at specific times of the year and cook them accordingly. Some even travel around the world just to pick up techniques and ingredients to add to their recipe books.

As traders, we should also try to mix things up. Just because a trend-catching system worked out well for you doesn’t mean that it will continue to do so for the rest of the year. Don’t be afraid to experiment on different trading styles, indicators, and techniques. In fact, having multiple, tried and tested trading strategies under your belt increases the chances of you becoming profitable no matter what trading environment you’re in. Record your experiments, test them, and refine them. If you run out of ideas, you can always visit forex trading forums and ask around for other traders’ opinions and strategies. You won’t even have to book a single flight! 4. Keeping the knife sharpened. The journey to become the best trader you can be doesn’t stop at mastering the fundamentals and having a bunch of strategies you can use. Just as the constantly evolving culinary scene keeps professional chefs on their toes, we should also keep up with the latest trends and changes in the forex industry. The correlations that you know today may not be valid in the years to come. Likewise, the trading methods that you’re currently using may one day be replaced with better, faster alternatives. The learning never stops if you’re passionate about what you’re doing.

There you have it, folks! I hope you learned a few bits from this comparison and as just as hungry as I am after writing this piece. Share with us your two cents or other trader-chef parallels that you know of! 10 Trading Affirmations to Begin Every Trading Day. How can you attain something you are striving for if you do not possess the proper mindset to achieve it? One thing I have learned through the years in my trading and business ventures is that if you want to become successful, you must control the narrative in your mind. If you constantly focus on negative things and let fear control your thoughts, you are going to go nowhere, fast. I would not have achieved the success that I have in trading, business or in my personal life if I was not consciously working to control the focus of my mind. Today’s article is going to provide you with a way to start each trading day in the best mindset possible. As I’ve written about often, your mindset is critically important to your trading; if your head isn’t right, you aren’t going to make money at trading, that is a fact. What we are aiming to achieve here, is to guide our thoughts to a place of positivity and confidence in one’s self. What you focus on and how you think is what determines your outcomes in life. There has never been a successful trader who didn’t fully believe they were going to be a successful trader beforehand. You need to work to cultivate the best possible mental environment to succeed at trading and this lesson will help you to do just that… Why Affirmations Work. According to the website learnmindpower.

com: When you verbalize something and repeat it to yourself, it will influence your thoughts. This is why affirmations are successful. If you say to yourself, “I will have a great interview”, you will automatically begin thinking about your upcoming interview as a great interview. What you focus on, you attract so begin using affirmations to focus on what you desire. There are three rules to remember when using affirmations: Always affirm the positive. Avoid asking yourself, “What if it’s a terrible interview?” or thinking things like, “I’m so nervous”. These statements focus on the opposite of what you want. Be positive, and use words that reflect what you want to happen.

If you want to be confident, use that word in your affirmation. Make your affirmations short and simple. Use a short phrase, or one sentence at the most. Your affirmation should be like a simple mantra that you can repeat over and over again, without thinking. Don’t force yourself to believe it. Just say it. You don’t need to force yourself to believe your affirmation, simply repeat it over and over and it will naturally have an effect on you. Repeating the statement many times will cause it to work for you. Affirmations are simple, easy to use, and very powerful. Many professional athletes use them to perform well. Successful business people use them to close deals and run their businesses, and artists use them to be creative and come up with innovative ideas. You can use them too, in any area of your life. Now that you understand why affirmations work and some simple rules to use them, let’s go over 10 trading affirmations you can use to not just start your trading day on the right note, but to help you develop a consistently profitable trading mindset: 1. “My mindset and mental skills are the key to making money in the market” Perhaps the most important thing to remind yourself of everyday is just how important your trading mindset is in relation to your performance in the market. As I said in a recent article on trading educator Mark Douglas, one of the most important things he wanted to convey to traders was that even if your method is a high-probability method, it’s the proper execution of that method that you need proper mental skills for. If you don’t have those mental skills, even a winning strategy will lose. A lot of people seem to be unaware of the fact that they are trading with a mindset that is inhibiting them from making money in the markets. Instead, they think that if they just find the right indicator or system they will magically start printing money from their computer. Trading success is the result of developing the proper trading habits, and habits are the result of having the proper trading psychology. – Nial Fuller.

2. “Trade and think like a ‘Baller” Continuing with theme of positive thinking and ‘fake it till you make it’ mentality, you really do need to believe in your ‘heart’ that you will become a successful trader, a baller, so to speak. The only way to achieve something is to prime your mind to achieve it, because your mind directs your actions. If your mind believes you can achieve something, then it will direct your behavior to turn those beliefs into actions and those actions will become habits, the habits that lead to consistently profitable trading. To read more about this, check out my article on how to trade like a ‘baller’. 3. “Trading is a game of probability, not certainty” So many traders get caught up believing every trade will be a winner, and they forget that there is simply no such thing as a 100%-win rate. It’s critical to remind yourself you will have losing trades, so that you do not become over-confident and end up risking too much or trading too much. You must remember that trading is a game of probabilities, not certainties. For example, even if you win 75% of the time, it means you lose 25% of the time, right? The CATCH is; you do not know WHICH trade will be one of the 75% winners and which will be in the 25% losing camp. It also means, that you could conceivably have 25 losing trades in a row, out of 100. You probably wouldn’t, but you could, so knowing that it’s a possibility to have a large string of losers, how are you going to approach risk management? Are you going to manage your risk like every trade will be a winner?

Or are you going to be realistic and try to remain neutral to the outcome of any one trade? If you are going to do the latter of those two, it means you would absolutely dial your risk per trade down to a dollar amount that you could stand to lose multiple times in a row, without become emotionally or financially damaged. Remember, your trade outcomes are randomly distributed, please click on the link if you don’t know what that means. If you have a weighted coin that will be heads 70% of the time, you still don’t know the sequence of heads and tails, all you know is OVER TIME 70% of the flips will be heads. 4. “I always use a stop loss to protect my money” First off, you must use a stop loss on every trade, always. I get emails nearly every week from traders telling me they either don’t use stop losses or asking me if they should use them. It only takes one huge move against you without a stop loss in place, to destroy your account. So, just accept right now that you MUST ALWAYS have a stop loss in place. Second, you must know how to place stop losses properly. I’ve written multiple articles about this topic (one I just linked you to) and I also discuss it in-depth in my trading course, so you can study those resources to learn more about it. For now, here is a quote about stop losses from one of the trading legends I wrote about in my Market Wizards article, Bruce Kovner: “Whenever I enter a position, I have a predetermined stop.

That is the only way I can sleep. I know where I’m getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis.” – Bruce Kovner. 5. “I enjoy taking profits, I will take the money when it’s there” This one may seem odd, but it’s important to remind yourself you need to take profits. Many traders hold and hold their trades until they turn into losses. In a recent article on this topic, I wrote about why you should ‘take the money and run’, regarding cashing out of profitable positions and booking profits. Too often, traders have no logical exit strategy in place and they just end up holding trades for way too long. I would even recommend, in the beginning stages, you look to take 1:1 risk: rewards, rather than holding for big profits all the time. This will help to build your trading account as you will hit more winners, but more importantly it will build confidence in your abilities and the method you are trading and will also allow you to get a good view of how accurate your trading edge (entry strategy) is over a large enough series of trades. 6. “I will not be influenced by news or other outside sources of ‘noise’” As I have written about previously, fundamentals and market news events are typically gigantic wastes of your time and energy and usually result in over-analysis, over-complicating things and as a result, losing money. But, you don’t have to take just my word for it, here is what trading legend Ed Seykota has to say about fundamentals: “Fundamentals that you read about are typically useless as the market has already discounted the price, and I call them “funny-mentals”. I am primarily a trend trader with touches of hunches based on about twenty years of experience.

In order of importance to me are: (1) the long-term trend, (2) the current chart pattern, and (3) picking a good spot to buy or sell. Those are the three primary components of my trading. Way down in a very distant fourth place are my fundamental ideas and, quite likely, on balance, they have cost me money.” – Trading legend Ed Seykota. 7. “I will let the market do the ‘work’, I will not meddle in my trades unnecessarily” The market is going to move up, down and sideways, it’s up to you find high-probability entry and logical exit points. What happens in between the entry and exit is typically what separates the successful traders from the masses of sheep losers. Successful traders are not meddling in their trades unnecessarily, they are letting the market do the ‘work’. Markets move, so let them move after you enter. Do not sit there staring endlessly at the charts in hope you are somehow going to will the price into moving in your favor.

You are there to read the price action and find potential entries that MIGHT yield profit, not to try and control the market, which you cannot do, so do not behave as if you can or you’ll just end up losing money. 8. “I will be a professional trader, not a professional gambler” Are you going to be a gambler or a trader? Gamblers play games of chance and understand they are not making skilled, high-probability decisions. They do not have planned approaches or methods (most anyways). It is incredibly easy to click your mouse, enter a trade and get that injection of adrenaline that makes you feel alive (just like a gambler), but is that going to lead to long-term success in the markets? Well, I think you know the answer to that. I suggest you focus on learning an effective trading approach like price action strategies and develop that into a trading plan you can implement to make yourself into a skilled trading machine instead of a random gambler with no discipline. 9. “Trading can be simple and easy, I will make it as such” Trading doesn’t have to be complicated or difficult, yet many people make it that way. You must remind yourself that it can be simple and easy, and you start by learning a simple yet effective trading method like price action. All you really need for technical analysis is an understanding of price action, trends and levels, or T. L.S – Trend, Level, Signal, something I teach in-depth in my trading courses.

You don’t need messy indicators, period. You don’t need messy charts or messy thinking (fundamentals, news, etc.) All you need is your own mind and an understanding of T. L.S, money management and trading psychology. 10. “Trading success is not dependent on luck or intelligence” Here is a good quote from The Turtle Traders co-founder, William Eckhardt on intelligence in relation to trading success: “I haven’t seen much correlation between good trading and intelligence. Some outstanding traders are quite intelligent, but a few aren’t. Many outstandingly intelligent people are horrible traders. Average intelligence is enough. Beyond that, emotional makeup is more important.” – William Eckhardt. “In conducting the interviews for this book and its predecessor, Market Wizards , I became absolutely convinced that winning in the markets is a matter of skill and discipline, not luck. The magnitude and consistency of the winning track records compiled by many of those I interviewed simply defy chance.” – Jack D. Schwager.

If there is one key trait that trading success is dependent on more than any other, I would say it is persistence. Not everyone will succeed at trading, but of all that do, persistence is one thing they all have in common. You must believe the dream enough to turn that belief into action and action into habits, once you do that, you will be well on your way to becoming a professional trader. I WOULD LOVE TO HEAR YOUR COMMENTS & STORIES BELOW :) QUESTIONS ? – CONTACT ME HERE.



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