- 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 extends losses on dovish remarks from ECB members, trades near 1.0780
EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar influenced by the hawkish market sentiment surrounding the Federal Reserve and expectations of prolonged higher interest rates.
GBP/USD trades sideways above 1.2600 amid quiet session
The GBP/USD pair trades sideways around 1.2622 during the early Friday. The market is likely to be mute in light trading on Good Friday. Later in the day, the US Core Personal Consumption Expenditures Price Index will be released.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days. As this coiling up comes undone, investors can expect XRP to kickstart a massive rally.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.
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