The political landscape of a nation plays a major role in the economic outlook for that country and, consequently, the perceived value of its currency. The fiscal and monetary policies of any government are the most important factors in its economic decision making. Central bank decisions that impact interest rates are keenly watched by the forex market for any changes in key rates or future outlooks.
How important is to be aware of the world’s political events?
- Thread starter Rambo35
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very important.. world is characterized by internationalization and integration and because of it political events affects economical and contrariwise
I think its also affecting RUB because those sanctions to Russia. I am not very aware of it, only from news but I still think it affects USD/RUB and EUR/RUB currency pairs
Yeah, but here's the rub, newbies should avoid trading only on fundamentals until they have chalked up some invaluable trading experience..
I think another factor in politics one has to aware of that has effect on forex market is election in any given nation.
Elections can be viewed by traders as an isolated case of potential political instability and uncertainty, which typically equates to greater volatility in the value of a country's currency.
We know that change in government means change in policy, and this in turn can usually mean a different approach to monetary or fiscal policy, both of which, especially the former, are big drivers of a currency's value.
Elections can be viewed by traders as an isolated case of potential political instability and uncertainty, which typically equates to greater volatility in the value of a country's currency.
We know that change in government means change in policy, and this in turn can usually mean a different approach to monetary or fiscal policy, both of which, especially the former, are big drivers of a currency's value.
I think it is important to be aware of events that are going on in the world, but I also think that it important not to make assumptions as to how they will affect price.
Often the one event that you think the market is focusing on is not what is driving price at all. So the resulting moves appear to be counter-intuiative or confusing.
The market also is forward-looking, and so it discounts most events in advance. So the price moves when that assumption is proved to in fact be wrong, rather than confirmed.
Also remember that we, as retail traders, are often the last people to get these information on these events, and so in many respects they can be priced into the market long before we get a chance to act.
Often the one event that you think the market is focusing on is not what is driving price at all. So the resulting moves appear to be counter-intuiative or confusing.
The market also is forward-looking, and so it discounts most events in advance. So the price moves when that assumption is proved to in fact be wrong, rather than confirmed.
Also remember that we, as retail traders, are often the last people to get these information on these events, and so in many respects they can be priced into the market long before we get a chance to act.
The more you know the more you get.
Nowadays, I can't imagine the trading without reading, following and analyzing the world's most important news, events,economic movements and etc.
Nowadays, I can't imagine the trading without reading, following and analyzing the world's most important news, events,economic movements and etc.
Absolutely its important to keep tab of the ongoing events around the world atleast with respect to the political side. The candidates are responsible to bring out the reforms for the people so we need to have a knowledge of the candidates. Also various successful democratic governments like India etc. US being the developed country you need to know about the same likwise the ongoing debates for presidential campaigns going on in the US. The debates go on around different aspects like economy, external affairs etc. which showcase the candidate's reforms for the same. The next one is GOP Debate of the republican party and trust me its fun to watch people like Trump, Carly etc and they taking on each other.
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Obviously it's very important. But you must remember, that everything you know everybody else have access to know as well. So don't think it give you an advantage necessarily. Just take it into consideration and trade carefully
As a trader we have to know what is going on and if we are wise enough then we will be able to use our knowledge in our trades easily, but still we must know that trading is not going to be easy.
But the knowledge will surely help us in becoming better Forex traders
It is really important for us to know what are the events that are going to have an effect on our trades. Because only then we would be able to take their advantage in our trades easily
True, but you must remember that every trader around the world have this information. So it can be risky. Sometimes after good economic release the market goes in the opposite direction than you would expect and that make sense. This is because some people and institutes know this information before the public, so the price already include the expectations and they take advantages of the release itself in order to sell their position (or buy back) and realize profits.It is really important for us to know what are the events that are going to have an effect on our trades. Because only then we would be able to take their advantage in our trades easily
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