The global foreign exchange (Forex) market constitutes a vast and intricate financial ecosystem in which currencies from across the globe are traded. This marketplace witnesses the exchange of trillions of dollars on a daily basis, rendering it among the most liquid and dynamic markets on earth. Amidst this bustling activity, central banks play a pivotal role,...
Hello,
Welcome to this analysis about Central-Bank-Digital-Currencies in which I will explore the ongoing process by central banks to generate Digital-Currencies that replicate the individual Fiat-Currency, its characteristics, its possible manifestations, and its differences to the classical cryptocurrencies we all know as Bitcoin or Ethereum created in the...
Based on my research into IPDA and algorithms, central banks, trading firms/hedge funds, and smaller banks use execution algos (EAs) for trading with different objectives. Small banks use EAs to split large parent orders into smaller child orders generally in one direction, buy or sell. These orders are executed separately over a period of time to either open or...
Hello everyone! Here you have some information that I consider useful on how to interpret and use economic indicators and data to make informed trading decisions in the foreign exchange market:
GDP (Gross Domestic Product) - GDP is a measure of a country's economic output and is considered to be one of the most important indicators of economic growth. A higher...
Hello again! Interest rates can have a significant impact on the forex market , as they can affect the demand for and supply of different currencies. In general, higher interest rates tend to attract foreign investment and increase the demand for a currency, as investors can earn a higher return on their investments. This can lead to an appreciation of the...
Hello traders and future traders! The state of an economy can be either growing or shrinking. When an economy is growing, it typically leads to improved conditions for individuals and businesses. Conversely, when an economy is shrinking or experiencing a recession, it can have negative consequences. The central bank works to maintain a stable level of inflation...
The Federal Open Market Committee (FOMC) is set to meet next week, and investors are eagerly anticipating the outcome of the meeting. Bank of America Global Research has discussed its expectations for the meeting, saying that it expects the Fed to raise its target range for the federal funds rate by 50bp in December to 4.25-4.5%.
According to Bank of America, the...
These are my comments from some conversations I had and I hope you like it :)
It is a weird environment overall, as the market is pretty cheap, the derivatives markets are fairly well balance, on chain data & stablecoins paint a bullish picture for crypto... but in terms of TA and the overall psychology of the market, getting to anywhere between 20-28k &...
How many times have you heard that bitcoin is very expensive? How many times have you heard that Bitcoin is a Ponzi scheme?
PERSPECTIVE. That is what is needed to combat some of the myths that surround this cryptocurrency, which will probably take part in the digital economy.
Regarding the first question, is $1T too much capitalization for a finite,...
This is a simple study of how interest rates influence the market.
I included 10 last values in my indicator. The base currency (GBP) is black. The second currency (USD) is red.
Between June and December, FED (USD) increased the interest rates 3 times by 0.250
BoE (GBP) also increased the interest rates by the same number but only once.
Obviously, this was a...
Before you trade stocks, bitcoin, FX, bonds or anything you have to try and understand how our monetary system works not to miss the big picture.
This video helps you by providing a 10.000 foot view of the global macro landscape. Don't miss the forest for the trees.
Tune in and enjoy!
In this article, I show you my way of working in Forex, starting with the choice of the currency pair, passing through all aspects of the operation (position size, maximum loss, etc.), until the analysis of the currency pair and the strategy to be adopted (entry-level, stop-loss and target).
Looking at the table of currency pairs I follow, the one that caught my...
The goal of this article is to understand what really moves the markets.
1. Central Bank Decisions
These organizations manage the countries monetary system and policy.
They control the countries money supply and operate through specific mandates.
Stable inflation is a common mandate applicable to the majority of central banks.
Interest rates are a crucial tool...
WHILE ALL PRICES HAVE RISEN SINCE 1913 (THE CREATION OF THE FEDERAL RESERVE), SOME HAVE DONE SO MORE THAN OTHERS!
THE FINANCIAL SYSTEM HAS BECOME SO LARGE AND COMPLEX THAT IT IS IMPOSSIBLE TO TRACE THE ACTUAL SIZE OF THE ENTIRE MONEY SUPPLY ( M3 )!
WHEN IT COMES TO ESTIMATION, YOUR GUESS IS AS GOOD AS ANY EXPERT'S!
THE ONLY WAY TO DETERMINE IF M3 IS RISING OR...
One of the main economic indicators for currency valuation is the real interest rate differential between the two countries / currencies.
The large flows of fixed income always go to where there is the highest real yield, interest rate discounted from inflation. The carry trade.
It is possible to see in the USDCAD example on the graph the great correlation...
TO UNDERSTAND THE STOCK MARKET'S MOVEMENT, YOU MUST UNDERSTAND WHICH FACTOR IS THE MOST INFLUENTIAL:
THE DOLLAR!
IF THE FED HAS SUCCEEDED IN SATISFYING THE GLOBAL DOLLAR SHORTAGE, THE STOCK MARKET WILL CREATE NEW ALL-TIME HIGHS!
IF THEY HAVE FAILED, ANOTHER WAVE OF ILLIQUIDITY WILL OCCUR!
THE PRICE OF OIL IS THE MOST DIFFICULT PRICE TO MANIPULATE FOR CENTRAL BANKS!
HOWEVER, THROUGH VAST AMOUNTS OF FIAT CURRENCY CREATION, THE PRICE OF OIL INCREASINGLY REFLECTS THE DEBASEMENT OF THE U.S. DOLLAR, NOT REAL DEMAND!
TO OBSERVE THE DIVERGENCE BETWEEN THE INFLATED U$D PRICE OF OIL AND REAL DEMAND FOR OIL, COMPARE THE PRICE OF OIL TO THE PRICE OF GOLD!
