- Jose M Piñeiro started in the forex industry in 2002 as an Operations Specialist and then Compliance Offi cer for FXCM in New York when the online retail forex market was still getting off the ground and expanding rapidly. He has spent the last seven years working for Web Financial Group (WFG), based in Madrid. He is now forex analyst for WFG’s forex website, fxmania.com.
Traders often underestimate the importance of personal interpretation of economic data in order to come up with a forex trading strategy. Without undermining the potential effectiveness of trading signals and automated trading, a trader’s personal intuitiveness and insight ‘beyond the numbers’ will ultimately make the difference between a successful and a bad forex trader. After all, if a particular trading strategy or a set of trading signals were absolutely effective, then everybody would be a successful trader. If such a successful trading strategy exists, it must be a very well-kept secret. Therefore, how do we improve our odds in forex trading?
First, Understand the Market
To start, forex traders should take a good look at currency trading symbols. Unlike stock symbols, for instance, there is an inherent meaning in the way currencies are quoted. Let’s take a look at the USD/ JPY, where the US dollar is the base currency and the Japanese yen is the counter currency. The symbol helps traders realise that there is a bi-dimensional relationship in every transaction. This is not so obvious in any other market.
In all transactions, there is a purchase of one item and a simultaneous sale of another item. The ‘USD/ JPY’ symbol shows that someone is buying US dollars and someone is selling Japanese yen or vice-versa. This relationship is not so evident when traders buy shares of Apple. The stock is not listed as APP/USD although traders are buying or selling Apple shares in exchange for US dollars.
Editors’ Picks
EUR/USD stays below 1.0700 after US data
EUR/USD stays in a consolidation phase below 1.0700 in the early American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold manages to hold above $2,300
Gold struggles to stage a rebound following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% ahead of US data, not allowing XAU/USD to gain traction.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.
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