Article Forex Trading – Getting to Know the Bigger Picture

T2W Bot

Staff member
Choosing what currency to invest in can be a daunting prospect. If you want to invest in a company you can check out its latest accounting statement to get the basic information you need: whether it is making or losing money, how much debt is held on the balance sheet etc. But there is no similar snap shot for individual currencies. A successful forex trader needs to keep up to date with economic data, geopolitical tensions as well as political landscape since all of these factors can move forex markets.
But, luckily for FX traders, there are some historical relationships that help make sense of the wider currency market. Firstly, the safe haven. Japan may have a debt-to GDP ratio of close to 200 per cent, yet the yen is considered a safe haven currency and tends to rally during periods of risk aversion. Whether or not it will continue to do so post the earthquake we will have to see, but it may take hefty amounts of G7 intervention in the FX markets to keep the yen down when...

Continue reading...
Last edited by a moderator:


Getting to Know the Bigger Picture

I think the title is a good intro for new traders, however it’s a bit simplistic, correlation of all assets classes if far from a science. I worked as junior Macro Trader for Hedge Fund in 2006, when the Interest rates yield curve inverted and senior Traders and Analysts mentioned this had never taken place, IR swaps markets became increasingly difficult to make large profits as in the past, strategy had to change and adapt, carry trades simply disappeared due to the trading environment at that time. I watched mass selloff of Equity, Bond markets which were inevitable at the point. Critically Credit spreads exploded, Credit defaults of an unprecedented scale, bankruptcy and exist of Global financial players. Now that QE has arrived the past 4 years has distorted the picture, as Central banks, simply print money propping up the inter-banking system, lack of credit of governments, sovereign, corporate and retails level are a real problem. Unfortunately 2012 political arena will be the play one of the biggest influence on the markets, Euro crisis (still not satisfactory resolved), US elections and Commodities, Oil, Iran old embargo for example. John Murphy’s is a great columnist demystify technical Analyst and dissecting several points you and I have very briefly touched upon … hopefully you may discuss in more depth in one of your forums. Many thanks Kathleen cheers Ken.
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock    No Thanks