NiaTradingSignals

I believe that the foreign exchange markets, on average, give more to the investor than is put into it each and every year. This is not only due toinflation, but also due to the influence that institutions and governments use to keep the markets in economically safe levels. For example if I had bought the eurodollar when it was at about 1 euro to 1 USD I would have increased my earnings by 50% without ever having made another trade. Add levearage to that and you can see there are some people who made a killing .

To a government like the European Union, it is in their best interest to value their currency in order to make imports cheap, but also be able to export goods that the area produces.If the pound was to move to 3:1 against the Euro, the exports from European Union would be far too expensive for the UK to buy. Thus hurting Europe as a whole.

Banks and governments spend billions, probably trillions trying to regulate the Foreign exchange markets each year. Governments buy and sell their own currencies to promote the best economic scenario possible for their country or region.

It is well known that China controls over one trillion dollars worth of US Dollars. Holding large quantities of the dollar keeps it own currency values up (since the Yuan is tied to the US dollar) and also allows the nation to influence world economics.

If the Chinese were to sell their dollars, it would drop the value of the dollar and its own currency, effectively making Chinese goods that much cheaper to the overall market.

Tomorrow I will explain how this works, and why it benefits you as a forex trader.

Positive Odds in Forex Trading #2