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8 Reliable Ways to Predict Movement in the Forex Market

The ability to skilfully predict changes in the forex market can be the difference between a trader making profit and losses. To survive and thrive in the forex market, it’s important to grasp the factors that cause changes in the price value of currencies. These eight factors will help you forecast any changes in the forex market, allowing you to gain an edge in the trade.

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The Consumer Price Index (CPI)

This is the measure of the prices of consumer products and services, such as food, transportation, automobiles, and healthcare. The measure helps a country keep a leash on prices by indicating when prices are rising (inflation) and when they are falling (deflation).

As a forex trader, you should keep updated with current inflation rates so as to accurately predict market movements. When inflation rates are stable, then you know you can go ahead and trade that currency pair. However, with high inflation rates, trading in that country’s currency will lead to losses.

Trade and Capital Flows

With forex trade being a global industry, the capital or trade flows in and out of a country can increase or decrease its currency value. Before predicting a currency’s performance, check whether its country is heavily dependent on exports, because in the event the exports drop, the currency will fall.

Capital flow is the money investors inject in the country. A currency value is hurt if investors flee from a country, for instance, due to political upheavals, lack of political goodwill, etc. It is thus an important factor when pondering how to predict forex markets.

Economic Growth

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The performance of a country’s economy has an impact on its currency. Generally, a stronger economy creates the environment for a stronger currency. This is because; the higher the economic growth, the more opportunities to invest and conduct business in the country. This increases the demand for the local currency, lifting its value.

Interest Rates

Just like with economic growth, the more the interest rates of a country increase, the more its currency becomes stronger. This is because higher interest rates attract investors to save their money in bonds, stocks and savings accounts, causing an increase in demand for the local currency.

Geopolitics

Any disturbance of the political scene in a country causes a shake-up in the forex market. Since a currency is representative of a country, government politics and global relations will often determine its stability or its fall in value.

Mergers and Acquisitions

This factor is useful when predicting the short-term movements in forex trading. When a foreign country firm purchases or consolidates with a company in a particular country, it causes an economic ripple on the local country, causing a change in currency value. Any savvy forex trader will keep an eye open for this sort of movement and either lean in to capitalize on it or avoid investing, depending on the economic effect the move causes.

Natural Disasters

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Catastrophic natural events on a country, e.g. earthquakes, hurricanes and floods usually impact a country’s currency, and not in a positive way. The aftermath of such events, from national apprehension to damaged infrastructure – which is the backbone of any country’s economy, to loss of life, causes a currency to depreciate.

Wars

Much like natural disasters, war can have a devastating impact on a country’s economy. Apart from the destruction of infrastructure, wars can devalue a country’s currency value by the ripple effect of the massive rebuilding efforts – which cost massive amounts of money. This is because reconstruction efforts require capital obtained from very low-interest rates, diminishing the value of the local currency.

Forex traders should be on top of any such development so as to be able to predict the direction of forex movement in the country. If a widespread war occurs in a country whose currency is part of your currency pair, then you’ll know to hold out until the economy stabilizes.  

Summary

Forex traders have information at their disposal to assist them more than ever before. Taking calculated risks is the key to making maximum profit in the forex industry, and that starts with watching out for events that may rock their currency pair’s exchange rates. This information will enable you to strategize even better; by having an accurate idea of when to enter or exit the market.

Budget Blast: Having Fun With Your Money

The world of finances can often be a very boring one for those who don’t know much about it. Counting beans and making sure you have enough of the stuff is the most important part of it all, though you will also need to make sure that you are saving for the future. This post isn’t about the drab side of your money, though, instead focusing on some ways to have a little bit of fun with it. Before starting, it’s worth considering moderation. These ideas are just for fun, and shouldn’t come before covering your other financial commitments.

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Playing Games

The world of video games has been growing a lot over the last few decades. People across the world are enjoying digital experiences, and there are more games than ever before to sink your teeth into. Of course, though, there are some games which can be connected to your finances. Betting and gambling can be great fun when they are done in moderation, with the thrill of winning being a great way to make you think more about your finances. Tools like premiere league stats for betting can help you out with this, giving you a much better chance of winning the games you play.

Making Investments

While this next area is often seen as extremely serious, making investments can be a great way to have some fun with your cash. There are loads of businesses out there that need help with their general operations. Putting money into their pot will often give you a small chunk of the business, while also giving you an insight into the way they work. Even the process of choosing a company to invest in can be a lot of fun, and will almost feel like a game. Of course, it’s not worth putting serious money into something like this unless you plan to make something out of it, and this will be harder than simply having fun.

Moving Money

There are always loads of different types of bank account available in the modern world, and most people have to use at least one of them in daily life. Not a lot of people realise that these types of services are changing all the time, though. It can make sense to move your money around on a regular basis, choosing accounts based on the interest you’ll get back from them. Of course, though, you have to treat this like a game if you’re going to have fun with it. Applying for an account with a higher rate than you’ve had before will be a high score, while doing research will be the work which gets you there.

Having fun with money isn’t something which a lot of people realise is possible. It makes sense that people worry about this side of life, but this doesn’t mean that you should have to treat it like something which is only serious. Instead, by having fun with this part of your life, you can push yourself to learn more about it, while also making significant improvements in the process.

Lifelong Money Plans

Eurgh, we’re already in enough of tizz about our short term money plans, so why would we want to throw in lifelong ones as well. We’re sure that’s what you thought when you read the title, but there’s so many things that you should be thinking of when it comes to money. Money really does make the world go round, and there’s not much that you can do without it. And there’s a lot less you can do when money starts to go downhill. So if you’re someone who is always focused on the short term stress of your money situation, rather than thinking about what could be done in the long term, then you really are doing it wrong. Short term problems are short term for a reason, they will go away in no amount of time. But it’s the long term things that you really want to be thinking about. The problems and scenarios that are going to follow you through life, and that you really want to have plans in place for. So keep on reading, and see how your lifelong money plans could change.

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Payments That Last A Lifetime

There are some payments that will literally last you a lifetime. The ones that once you’re tied into, you know you just can’t get out of because your lifestyle depends on it. We’re obviously talking about your mortgage, and it definitely can feel like it’ll last a lifetime. But what makes it worse, the payments can just be so hard to manage, and getting them down seems near enough impossible. But have you ever thought to compare equity release, and see how that might benefit you? Releasing equity can take so much off your mortgage each month, you just have to look into it, and look into the right lenders. Remortgaging is also a good idea. Again, it will take your monthly payments down, even if just by a little bit, and improve your monthly expenditures on your home.

Investments Into Your Family

Your family should be one of the things you’re constantly investing in. As soon as you have children, your whole life begins to revolve around them, and there are easy ways that you can invest in the future of it. One way of doing so, would be to try and set up trust funds, which can then be transferred to your children when they come of age. Trust funds are an excellent way of making money on investments, far better than just putting your money into a normal savings account for them.

Working Your Way Out Of Money Troubles

Money troubles can stick with you for life if you don’t work on them now, and it’s so important that you really do work on them now. We’re thinking about debt, and how crippling that can be over a lifetime. So, if you really have got yourself into a pickle, you should think about contacting debt advice services. They can set you up with a plan to pay it all off, and to help you get your life back on the right track!

A Quick Introduction to Short Selling Currency and Its Use in the Forex Market

There are many strategies used when trading in the financial markets. Traders in the markets often buy shares or assets when they think that their value will go low. When a trader does this, the expectation is that the value of that asset will go high just in time for them to sell. By doing this, therefore, the trader is able to make some money. This is what shorting is all about in the markets. In the currency market, this process is a bit different since it involves two currencies where the short position sees one currency in the pair falling and the other one rising. Let us look at the strategy in detail.

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Short Selling in the Currency Market

As stated in the introduction, short selling in the forex market involves a pair of currency. Take the USD/EUR pair for instance. This pair comprises of base currency (the USD) and the quote currency (EUR). If the quote of the currency is USD/EUR=0.88 and the trader decides to go short, then they will basically be short selling the base currency while going long on the quote currency. In the hypothetical situation here, quote indicates that 1 USD equals 0.88 EUR.

The Premise of Shorting in the Forex Market

The premise of every trade done by a trader is that their move will allow them to make a profit. When a trader is short selling the USD therefore, they are expecting that at a point in time, the USD will be lower in value compared to the EUR. The ideas that inform such a move come from the research done on the market. Short selling in the currency market is pretty straightforward. There are no special requirements that a trader needs to comply with, nor are there special rules on the trade.

Risks Involved in Short Selling

Like in every other market, there are risks involved in going short particularly in the currency market. When a trader decides to go short, they are putting themselves at risk of losing money exponentially. This is because short selling assumes that the price will fall. If the price decides to rise however, there is no upper limit on how much the price of the currency can rise. Long selling does not have such a risk since the price of the currency can only fall to zero and not beyond. Traders thus are exposed to risk when going short and there needs to be a means of limiting the risks.

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How to Limit the Risks?

Fortunately, there are a number of ways through which a trader can limit the risks of short selling. One of the most effective ways of doing this is by using a stop loss. Stop losses are used across the financial markets and they provide a simple mechanism of exiting the trade when there are no profits to be made. The stop-loss tells the broker to exit the trade when a set short value limit is reached. The opposite this is placing a limit order, which exits the trade when the projected profit is met.

Crucial Issues to Note When Short Selling

As previously indicated, the forex market is great for traders who want to short sell. It is a flexible market that welcomes traders of all calibers. The market is nevertheless quite risky when it comes to short selling, especially when compared to other markets. The upper limit of loss is virtually infinite even though the lower limit of profit is 100%. Traders need to be prudent when trading in this market, therefore.

In summary

Short selling is a great way to make money in the forex market. For this strategy to succeed, the forex trader needs to be a good risk manager. The use of tools like stop loss is advised as the market is rather unpredictable. It is advisable to never risk more than 1% of the account. The basic premises of shorting in the market is similar to what is common in other financial markets. With proper strategies on risk elimination, there is a lot to be gained when shorting in the foreign exchange market.

Your Checklist: 5 Brilliant Investment Tips That Will Generate You Millions

In today’s modern society where debt is national and public debt is higher than it’s ever been, and no matter how much some of us don’t like it, money is the tool for achieving freedom and allows us to do what we want, it’s no wonder so many have their eyes set on the 1-million-dollar milestone.

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Having this amount of money in your bank account will typically mean you’ve reached a level of financial security and you can focus on the more positive aspects of life. One of the best ways to do this is to invest your
money now and get the return in the future, but you’re probably wondering how to do this.

While there are plenty of ways to invest your money, today we’re going to explore the five most brilliant investment tips you need to know in order to hit seven digits in your bank account.

#1 – Don’t Worry About Small Losses

It’s easy to get caught up in the trap of checking your investments every second of every day. However, this a sure-fire way to caught up and disappointed with your everyday losses, which are to be expected when you’re on an investment plan.

This can then cause you to make rash decisions that are going to leave you worse off in the long-term. Instead, remember to play the long game and remember that small losses are expected on your way to large wealth.

#2 – Avoid Penny Stocks

The common problem with investment is the temptation to invest your hard-earned money into penny stocks. After all, surely there’s less to lose over the long-term? However, this just a misconception because even if your $10 stock plunges to zero, mathematically, you’ve still lost 100% of your original investment.

This means the risk is just the same, but you’re not opening yourself up to the opportunity of earning more profit back on your original funds. Penny stocks also tend to be less regulated than higher earning stocks.

#3 – Don’t Chase the Highest Tips

During your time in the investment industry, you’re going to be presented with ‘tips’, or ‘hot tips’ that are going to try to persuade you into buying into certain stocks or shares for maximum, lucrative returns.

While these tips could be right, never take them at face value and always do your own research prior to investing your hard-earned money. The more you know about an investment yourself, the safer the bet will be.

#4 – Have an Open Mind

One of the most important things to remember is that you need to go into your investment strategy with an open mind. There are a ton of smaller stocks out there, especially in tech or in other industries that may be small now but have a huge potential to become blue-chip clients in the future.

Again, do your research and get as educated as you possibly can. The more informed you are, the more likely you are to get the best results.

#5 – Stick to Your Guns

When you’re investing your money, most of the time you’ll have a strategy, whether that’s one you’ve made yourself or developed using a professional financial advisor, like this Sydney finance broker. Strategies are designed to work well over the long-term; and if you panic and keep changing it, you’re never going to get the results you’re aiming for.

Summary

This is just scratching the surface of what tips are out there when it comes to turning a small fortune into millions. The best way to go is to get as educated as you can on the subject and use a professional advisor to help you make these all-important decisions.