Winning Stratgies استراتيجات فوركس

[abdellatif]

السلام عليكم ورحمة الله تعالى وبركاته
بسم الله الرحمان الرحيم
Winning stratgies
فكرة خطرت على بالي و ارى ان فيها افادة ان شاء الله لكل المتداولين المهتمين بالتعلم و المحبين لامتلاك سلح التعلم و هو الوسيلة الوحيدة للنجاح..
و رغبتي في المزيد من التعلم احببت ان ارفق في كل مرة مقتطفات من كتاب مفيد باللغة الانجليزية من البداية حتى النهاية للمتداول المبتدأ و المحترف..
بين كل فقرة سيكون هناك وقت مستقطع للفهم و تثبيت المعلومة..ولمن يريد التعلم و يناقش فهده هي الفرصة..
الباب مفتوح لمن اراد ترجمة كل فقرة يتم ارفاقها شرط ان تكون الترجمة دات جودة عالية..
فمرحبا بكم معنا هنا في هده الجولة التعليمية
البداية
Getting Started

.Forex (or FX) refers to the foreign exchange markets, where currencies are traded
It is the biggest and fastest growing financial market in the world, with an average
daily turnover of almost $2 trillion – many times the total traded volume of the US
.stock exchanges

The forex market consists of a worldwide wired network of buyers and sellers of
currencies, with trading all done over-the-counter (OTC), which means that there
is no central exchange and clearinghouse where orders are matched. If you are
looking for 24-hour action, you can find it in this global trading system, where no
physical barriers exist and activity moves seamlessly from one major financial
.centre to another

A reason why there is a veil of mystery over forex is that the market was once the
,exclusive playground of banks, hedge funds, corporations and financial institutions
,where money changed hands for commercial and speculative purposes. However
forex has now expanded and is easily accessible to all traders with the rapid
emergence of online currency trading platforms. Many of these platforms are wellequipped
with free charting software, real-time news-feeds and easy-to-use order
placing systems

The wide availability of sophisticated technology has spawned a whole new level
of foreign exchange, where self-directed (so-called “retail”) traders can easily buy
,and sell currencies through an internet connection with a click of the mouse
dealing with invisible counter-parties on the other side of the transaction. This

group of people (also known as

speculative traders) engage in trading forex for the

sole purpose of making profits

Welcome to the new world of online forex trading

The rapid fluctuations of currency exchange rates are what attract speculators to the
forex market as currencies are highly sensitive, and thus react very fast to changing
economic conditions of countries or regions, changing interest rates and political
happenings around the world. Sometimes central banks of countries attempt to
intervene in the forex market if the policy-makers feel that their country’s currency
is too strong or too weak for their own good. All these factors lead to high volatility
of currency prices, which can be taken advantage of by traders who speculate on
.the direction and magnitude of the current and future price move

I would like to point out that while movements in certain currency pairs can be
,quite volatile in nature, most major currencies generally move less than 1% daily
which is much lower than that of active stocks, which can easily move between5 10%per day. For a rough guide of currency pairs and their relative volatility, refer
.to Figure 1.1 under “Warming Up” in the later part of this chapter

Forex has increasingly become an extremely attractive alternative asset group for
speculators to trade, in addition to the usual staple of stocks and futures

Anyone can trade forex, but not every one can be profitable. That’s the rule of any
game –

not every one can win

[abdellatif]

السلام عليكم ورحمة الله تعالى وبركاته
بسم الله الرحمان الرحيم
Winning stratgies
فكرة خطرت على بالي و ارى ان فيها افادة ان شاء الله لكل المتداولين المهتمين بالتعلم و المحبين لامتلاك سلح التعلم و هو الوسيلة الوحيدة للنجاح..
و رغبتي في المزيد من التعلم احببت ان ارفق في كل مرة مقتطفات من كتاب مفيد باللغة الانجليزية من البداية حتى النهاية للمتداول المبتدأ و المحترف..
بين كل فقرة سيكون هناك وقت مستقطع للفهم و تثبيت المعلومة..ولمن يريد التعلم و يناقش فهده هي الفرصة..
الباب مفتوح لمن اراد ترجمة كل فقرة يتم ارفاقها شرط ان تكون الترجمة دات جودة عالية..
فمرحبا بكم معنا هنا في هده الجولة التعليمية
البداية
Getting Started

.Forex (or FX) refers to the foreign exchange markets, where currencies are traded
It is the biggest and fastest growing financial market in the world, with an average
daily turnover of almost $2 trillion – many times the total traded volume of the US
.stock exchanges

The forex market consists of a worldwide wired network of buyers and sellers of
currencies, with trading all done over-the-counter (OTC), which means that there
is no central exchange and clearinghouse where orders are matched. If you are
looking for 24-hour action, you can find it in this global trading system, where no
physical barriers exist and activity moves seamlessly from one major financial
.centre to another

A reason why there is a veil of mystery over forex is that the market was once the
,exclusive playground of banks, hedge funds, corporations and financial institutions
,where money changed hands for commercial and speculative purposes. However
forex has now expanded and is easily accessible to all traders with the rapid
emergence of online currency trading platforms. Many of these platforms are wellequipped
with free charting software, real-time news-feeds and easy-to-use order
placing systems

The wide availability of sophisticated technology has spawned a whole new level
of foreign exchange, where self-directed (so-called “retail”) traders can easily buy
,and sell currencies through an internet connection with a click of the mouse
dealing with invisible counter-parties on the other side of the transaction. This

group of people (also known as

speculative traders) engage in trading forex for the

sole purpose of making profits

Welcome to the new world of online forex trading

The rapid fluctuations of currency exchange rates are what attract speculators to the
forex market as currencies are highly sensitive, and thus react very fast to changing
economic conditions of countries or regions, changing interest rates and political
happenings around the world. Sometimes central banks of countries attempt to
intervene in the forex market if the policy-makers feel that their country’s currency
is too strong or too weak for their own good. All these factors lead to high volatility
of currency prices, which can be taken advantage of by traders who speculate on
.the direction and magnitude of the current and future price move

I would like to point out that while movements in certain currency pairs can be
,quite volatile in nature, most major currencies generally move less than 1% daily
which is much lower than that of active stocks, which can easily move between5 10%per day. For a rough guide of currency pairs and their relative volatility, refer
.to Figure 1.1 under “Warming Up” in the later part of this chapter

Forex has increasingly become an extremely attractive alternative asset group for
speculators to trade, in addition to the usual staple of stocks and futures

Anyone can trade forex, but not every one can be profitable. That’s the rule of any
game –

not every one can win

[gaka]

فعلا فكرة رائعة.. من المتابعين ان شاء الله...

[gaka]

فعلا فكرة رائعة.. من المتابعين ان شاء الله...

[م.نادر فريد]

فكرة موفقة ان شاء الله .

[م.نادر فريد]

فكرة موفقة ان شاء الله .

[abdellatif]

Trading Time Frames

Before you enter into a position, you need to know – beforehand – when you are
,going to exit the market. A trader is not going to hold onto a position indefinitely
that’s for sure. Knowing the time frame of how long you wish to hold onto your
open position will determine your exit points and prices. If you choose to hold a
position for, say, a week, your profit objective would naturally be higher than if you
were to hold it for a few hours because you would expect the price to move further
given the longer period of time

This is a personal decision which has to be made by the trader, depending on his or
her risk tolerance level, lifestyle desired, and the amount of time to be dedicated to
analyzing the market

:There are mainly four different types of trading time frames

1scalping
2day trading
3swing trading
4position trading
:These are explained below
1Scalping

This is the shortest time frame in trading; it exploits small changes in currency
prices. It describes the ultra-rapid action of opening and closing of a position within
a few seconds or minutes, with the aim of stealing a few pips from each trade. The
profit of the winning trade is small, while the number of such winning trades should
be big enough so that these small profits can add up to a decent amount

Scalpers usually need to have access to the tightest spreads and fastest connection
speeds possible, in order to carry out this bullet-speed trading with the tiny profits
They tend to do this many times a day so as to accumulate the little profits that are
harvested

Losses must be limited such that one large loss does not wipe out the profits gained
from many winning trades

Many forex market makers discourage this type of trading as they find it difficult
to cover the opposite side of the transactions, given the fast speed and numerous
orders entered into their systems

[abdellatif]

Trading Time Frames

Before you enter into a position, you need to know – beforehand – when you are
,going to exit the market. A trader is not going to hold onto a position indefinitely
that’s for sure. Knowing the time frame of how long you wish to hold onto your
open position will determine your exit points and prices. If you choose to hold a
position for, say, a week, your profit objective would naturally be higher than if you
were to hold it for a few hours because you would expect the price to move further
given the longer period of time

This is a personal decision which has to be made by the trader, depending on his or
her risk tolerance level, lifestyle desired, and the amount of time to be dedicated to
analyzing the market

:There are mainly four different types of trading time frames

1scalping
2day trading
3swing trading
4position trading
:These are explained below
1Scalping

This is the shortest time frame in trading; it exploits small changes in currency
prices. It describes the ultra-rapid action of opening and closing of a position within
a few seconds or minutes, with the aim of stealing a few pips from each trade. The
profit of the winning trade is small, while the number of such winning trades should
be big enough so that these small profits can add up to a decent amount

Scalpers usually need to have access to the tightest spreads and fastest connection
speeds possible, in order to carry out this bullet-speed trading with the tiny profits
They tend to do this many times a day so as to accumulate the little profits that are
harvested

Losses must be limited such that one large loss does not wipe out the profits gained
from many winning trades

Many forex market makers discourage this type of trading as they find it difficult
to cover the opposite side of the transactions, given the fast speed and numerous
orders entered into their systems

[abdellatif]

2Day trading

Day trading is one of the more popular types of trading, whereby traders open and
close positions within a day. They also do not hold their positions overnight
because of the added risk of not knowing if prices would change dramatically while
they sleep. The holding period of their trades may range from minutes to hours

Day trading relies heavily on intraday momentum to bring the current price to the
desired price level in one direction. Day traders are looking out for signs that a
currency pair has a high probability of moving in a particular direction, going from
point X to point Y, within a day regardless of whether the price is moving in a trend
or range

Day traders tend to wait for good trading opportunities, instead of trading
frantically like scalpers tend to do. This style of trading involves intense
concentration from the trader as positions must be closely monitored on the price
charts

3Swing trading

Swing traders hold their positions for a few days, but seldom more than a week
Identifying and riding on trends early is the central objective of this trading style
and the profit objective tends to be set higher than that of day trading since the
swing trader is expecting that by holding out for a few days, there is a better chance
of capturing a larger price move. Unlike the day trader, the swing trader has to
endure overnight risk

As swing trading requires much less minute-to-minute monitoring of the market
.this type of trading is generally preferred by people who hold day jobs

My opinion is that swing traders must still keep up-to-date with the latest
fundamental and technical changes in the market, even when they are not
.monitoring the market all the time

4Position trading

Position trading spans the longest period of time, and refers to traders holding their
position for weeks or even months. Position traders seek to identify and trade
currency pairs that signal that a medium to long term trend is playing out – but will
take more than a few days to play out. Their positions are usually closed before the
trend runs out of power. This trading time frame is the least time-consuming one
among all the different ones, as there is not much need for intensive monitoring.
Many position traders place a trailing stop which automatically closes their position
if the price retraces past a particular point

Choosing a time-frame

As a general rule of thumb: the smaller the time frame you trade then the more time
is needed to be devoted to monitoring the markets

Someone who day trades tends to be more in touch with the price swings and
goings-on of the market as positions are opened and closed during the same day
Whereas at the end of the spectrum, a position trader does not have to monitor the
market so intensively

Risk-wise, I would say that the longer the time frame used in trading, the more risk
has to be assumed by the trader. This is simply because the market has more time
to move against them, and can move much further against them than it can in a
smaller time frame

Many of the strategies mentioned in this book are meant for short-term trading
However, you may decide on the length of your holding period to suit your personal
preference by adjusting the profit target and stop-loss accordingly. Of course, the
size of profit objective and stop-loss will be proportional to the length of your
holding period – the shorter your time frame, the smaller your profit target and
stop-loss should be; the longer the trading time frame, the wider your profit target
.and stop-loss can be

[abdellatif]

2Day trading

Day trading is one of the more popular types of trading, whereby traders open and
close positions within a day. They also do not hold their positions overnight
because of the added risk of not knowing if prices would change dramatically while
they sleep. The holding period of their trades may range from minutes to hours

Day trading relies heavily on intraday momentum to bring the current price to the
desired price level in one direction. Day traders are looking out for signs that a
currency pair has a high probability of moving in a particular direction, going from
point X to point Y, within a day regardless of whether the price is moving in a trend
or range

Day traders tend to wait for good trading opportunities, instead of trading
frantically like scalpers tend to do. This style of trading involves intense
concentration from the trader as positions must be closely monitored on the price
charts

3Swing trading

Swing traders hold their positions for a few days, but seldom more than a week
Identifying and riding on trends early is the central objective of this trading style
and the profit objective tends to be set higher than that of day trading since the
swing trader is expecting that by holding out for a few days, there is a better chance
of capturing a larger price move. Unlike the day trader, the swing trader has to
endure overnight risk

As swing trading requires much less minute-to-minute monitoring of the market
.this type of trading is generally preferred by people who hold day jobs

My opinion is that swing traders must still keep up-to-date with the latest
fundamental and technical changes in the market, even when they are not
.monitoring the market all the time

4Position trading

Position trading spans the longest period of time, and refers to traders holding their
position for weeks or even months. Position traders seek to identify and trade
currency pairs that signal that a medium to long term trend is playing out – but will
take more than a few days to play out. Their positions are usually closed before the
trend runs out of power. This trading time frame is the least time-consuming one
among all the different ones, as there is not much need for intensive monitoring.
Many position traders place a trailing stop which automatically closes their position
if the price retraces past a particular point

Choosing a time-frame

As a general rule of thumb: the smaller the time frame you trade then the more time
is needed to be devoted to monitoring the markets

Someone who day trades tends to be more in touch with the price swings and
goings-on of the market as positions are opened and closed during the same day
Whereas at the end of the spectrum, a position trader does not have to monitor the
market so intensively

Risk-wise, I would say that the longer the time frame used in trading, the more risk
has to be assumed by the trader. This is simply because the market has more time
to move against them, and can move much further against them than it can in a
smaller time frame

Many of the strategies mentioned in this book are meant for short-term trading
However, you may decide on the length of your holding period to suit your personal
preference by adjusting the profit target and stop-loss accordingly. Of course, the
size of profit objective and stop-loss will be proportional to the length of your
holding period – the shorter your time frame, the smaller your profit target and
stop-loss should be; the longer the trading time frame, the wider your profit target
.and stop-loss can be

[abdellatif]

	المشاركة الأصلية كتبت بواسطة gaka

	فعلا فكرة رائعة.. من المتابعين ان شاء الله...

	المشاركة الأصلية كتبت بواسطة م.نادر فيليب

	فكرة موفقة ان شاء الله .

شكرا لمروركم..واتمنى لكم متابعة مفيدة والتي انا على يقين ان من طبق ماسيتابعه هنا سيكون من المتداولين الناجحين ان شاء الله..

[abdellatif]

	المشاركة الأصلية كتبت بواسطة gaka

	فعلا فكرة رائعة.. من المتابعين ان شاء الله...

	المشاركة الأصلية كتبت بواسطة م.نادر فيليب

	فكرة موفقة ان شاء الله .

شكرا لمروركم..واتمنى لكم متابعة مفيدة والتي انا على يقين ان من طبق ماسيتابعه هنا سيكون من المتداولين الناجحين ان شاء الله..

[abdellatif]

Strategy 1

Market Sentiment

? How do you view the forex market

Do you see it as a big mechanical matrix which is devoid of emotionsOr do you
think of it in mathematical and probability terms? Perhaps, you may even view it
as just a vast network of computers which are designed to cheat the trader sitting in
front of his or her computer and trading electronically. Most traders I know have a
love-hate relationship with the forex market, thinking that the market is, in turn,
either against them or for them

To me, the forex market is nothing more than the compressed display of emotions
at any one time emanating from currency speculators around the world. It is similar
to a big living organism, like a human being, which is made up of numerous cells
with each cell carrying out its own function and interacting with other cells of the
body, working to keep the body alive with round-the-clock chemical and biological
processes

The forex market is alive as a macro living organism, which comprises a vast
number of market participants acting out their perceptions and emotions, thus
driving the blood around the invisible entity. The participation of each player
whether the player is an institutional dealer or an independent trader, is akin to the
individual functioning of a cell, which collectively will constitute the whole
organism – the forex market in this case. Knowing what the market thinks and how
it thinks is crucial to trading success because, ultimately, the trader is dealing with
other traders out there, and needs to know what they are thinking. Even if you see
the market as an enemy, what could be better than knowing the weak points and
?being able to read the mind of your adversary

In this chapter, I shall focus on how you can better understand the market, and use
.that knowledge as one of your trading weapons

[abdellatif]

Strategy 1

Market Sentiment

? How do you view the forex market

Do you see it as a big mechanical matrix which is devoid of emotionsOr do you
think of it in mathematical and probability terms? Perhaps, you may even view it
as just a vast network of computers which are designed to cheat the trader sitting in
front of his or her computer and trading electronically. Most traders I know have a
love-hate relationship with the forex market, thinking that the market is, in turn,
either against them or for them

To me, the forex market is nothing more than the compressed display of emotions
at any one time emanating from currency speculators around the world. It is similar
to a big living organism, like a human being, which is made up of numerous cells
with each cell carrying out its own function and interacting with other cells of the
body, working to keep the body alive with round-the-clock chemical and biological
processes

The forex market is alive as a macro living organism, which comprises a vast
number of market participants acting out their perceptions and emotions, thus
driving the blood around the invisible entity. The participation of each player
whether the player is an institutional dealer or an independent trader, is akin to the
individual functioning of a cell, which collectively will constitute the whole
organism – the forex market in this case. Knowing what the market thinks and how
it thinks is crucial to trading success because, ultimately, the trader is dealing with
other traders out there, and needs to know what they are thinking. Even if you see
the market as an enemy, what could be better than knowing the weak points and
?being able to read the mind of your adversary

In this chapter, I shall focus on how you can better understand the market, and use
.that knowledge as one of your trading weapons

[abdellatif]

?What Is Market Sentiment

Market sentiment is simply what the majority of the market is perceived to be
thinking or feeling about the market – it is the most important factor that drives the
currency market

This is so because traders tend to act based on what they feel and think of certain
currencies, regarding their strength or weakness relative to other currencies. I will
assume that when you trade currencies, you don’t blindfold yourself to simply pick
any pair to buy or sell, leaving it to randomness to determine your profit/loss
statement at the end of the day or month

Market sentiment sums up the overall dominating emotion of the majority of the
market participants, and explains the current actions of the market, as well as the
future course of actions of the market. The trend adopted by the forex market is
actually a reflection of the current market sentiment, which in turn guides the
.trading decisions of other traders, whether they should long or short a currency pair
In the process of making educated trading decisions, traders have to weigh a
multitude of factors which could influence the bias of a currency, before making up
their minds about the current and future state of certain currencies. One thing to
note is that market sentiment is not logical; it is primarily based on traders’
emotions, which is really one of the greatest, if not the greatest, factor in the
determination of a currency exchange rate

There are three main types of sentiment when it comes to forming opinions in the
:forex market
1bullish
2bearish or
3just plain confused

If the majority of the market wants to sell that currency, the market sentiment is
deemed to be bearish; if the majority wants to buy that currency, the market
sentiment is bullish; and when most market participants are unsure of what to do at
the moment, the sentiment ends up being mixed. Since the US dollar is the currency
on the opposite side of 80% of all foreign exchange transactions, most traders will
be concerned with what the market thinks about the US dollar. Currency prices
simply embody the market’s perceptions of reality and the sum total of
traders’ emotions

Market sentiment acts like a fickle lover, capable of changing its mind based on
certain incoming new information which can upset the existing sentiment. One
moment everyone could be buying the US dollar in anticipation of a stronger dollar;
the next second they could all be dumping it as they fear the dollar would start to
weaken due to the impact of some new piece of information, which is almost
always some fundamental news

Understanding the current market sentiment and exploiting it appropriately with the
other strategies discussed in this book can help maximise your trading profits
because if you can guess what the other market players are thinking about, and
understand why the market is doing what it is doing, you will be in a better position
to plan your entry and exit points and timing

[abdellatif]

?What Is Market Sentiment

Market sentiment is simply what the majority of the market is perceived to be
thinking or feeling about the market – it is the most important factor that drives the
currency market

This is so because traders tend to act based on what they feel and think of certain
currencies, regarding their strength or weakness relative to other currencies. I will
assume that when you trade currencies, you don’t blindfold yourself to simply pick
any pair to buy or sell, leaving it to randomness to determine your profit/loss
statement at the end of the day or month

Market sentiment sums up the overall dominating emotion of the majority of the
market participants, and explains the current actions of the market, as well as the
future course of actions of the market. The trend adopted by the forex market is
actually a reflection of the current market sentiment, which in turn guides the
.trading decisions of other traders, whether they should long or short a currency pair
In the process of making educated trading decisions, traders have to weigh a
multitude of factors which could influence the bias of a currency, before making up
their minds about the current and future state of certain currencies. One thing to
note is that market sentiment is not logical; it is primarily based on traders’
emotions, which is really one of the greatest, if not the greatest, factor in the
determination of a currency exchange rate

There are three main types of sentiment when it comes to forming opinions in the
:forex market
1bullish
2bearish or
3just plain confused

If the majority of the market wants to sell that currency, the market sentiment is
deemed to be bearish; if the majority wants to buy that currency, the market
sentiment is bullish; and when most market participants are unsure of what to do at
the moment, the sentiment ends up being mixed. Since the US dollar is the currency
on the opposite side of 80% of all foreign exchange transactions, most traders will
be concerned with what the market thinks about the US dollar. Currency prices
simply embody the market’s perceptions of reality and the sum total of
traders’ emotions

Market sentiment acts like a fickle lover, capable of changing its mind based on
certain incoming new information which can upset the existing sentiment. One
moment everyone could be buying the US dollar in anticipation of a stronger dollar;
the next second they could all be dumping it as they fear the dollar would start to
weaken due to the impact of some new piece of information, which is almost
always some fundamental news

Understanding the current market sentiment and exploiting it appropriately with the
other strategies discussed in this book can help maximise your trading profits
because if you can guess what the other market players are thinking about, and
understand why the market is doing what it is doing, you will be in a better position
to plan your entry and exit points and timing

[abdellatif]

What Factors Influence Market
?Sentiment

Interest rates

Trends in interest rates are one of the most significant factors influencing market
sentiment, as interest rates play a huge role affecting the supply and demand
of currencies

Every currency in the world has interest rates attached to them, and these rates are
decided by central banks. For example, the Fed in the US determines the country’s
interest rates; the Bank of Japan (BOJ) sets Japan’s interest rates; the Reserve Bank
of New Zealand (RBNZ) decides on New Zealand’s interest rates and so on. Some
currencies have higher interest rates than others, and these are usually the
currencies that attract the most attention from savvy international investors who are
always looking across the global landscape in the continual search for a better
interest rate yield on fixed-income investments. This, of course, also depends on the
geopolitical or economic risks of that particular currency. Just like when a bank
lends money to a higher-risk borrower, high-risk currencies require a significantly
higher interest rate for investors to consider keeping money in those currencies

?What causes fluctuations in interest rates

The value of money can and does decrease when there is an upward revision of
prices of most goods and services in a country. Generally, when a country’s
economy expands or when energy costs go up, goods ranging from clothing, food
to computers, and services ranging from public transport to spa treatments get more
expensive, thus eroding the value of money. The nice word for this erosion in value
is, of course,

inflation

Controlling inflation

Central banks are responsible for ensuring price stability in their own country, and
one of the ways they employ to fight inflationary pressures is through the setting of
interest rates. If inflation risks are seen to be edging upward in, say, the US, the Fed
would raise the federal funds rate, which is the rate at which banks charge each
other for overnight loans. When the overnight rate is changed, retail banks will
change their prime lending rates accordingly, hence affecting businesses and
individuals. An increase in interest rates is an attempt to make money more
expensive to borrow so that there will be a gradual decrease in demand for that
currency, thus slowing down an overheated economy. The opposite scenario is true
too: when a country faces deflation, or even decreased inflation, which is often the

result of decreased spending, whether by the government, consumers or investors
it prompts the central bank to lower interest rates so as to stimulate spending

Interest rates and currencies

The most important way in which interest rates can influence currency prices is
through the widespread practice of the

carry trade

A carry trade involves the borrowing and subsequent selling of a certain currency
with a relatively low interest rate, then using the funds to buy a currency which
gives a higher interest rate, in an attempt to gain the difference between these two
rates – which is known as the

interest rate differential. The trader is paid interest
on the currency he or she is long in, and must pay interest on the currency he or she
is shorting. This difference is the cost of carry. Therefore, a currency with a higher
interest rate tends to be highly sought after by investors looking for a higher return
on their investments

Rising interest rates in a country tends to strengthen that country’s currency relative
to other currencies as investors exchange other currencies to buy the currency of
that country when they transfer their assets into the country with the higher interest
rates. The increased demand for that particular currency will thus push up the
currency price against other currencies

For instance, in 2005 there was a strong interest among Japanese investors to invest
in New Zealand dollar-denominated assets due to rising interest rates in New
Zealand. The then near-zero interest rates in Japan forced a lot of Japanese
investors to look outside of their country for better yields on cash deposits or fixedincome
instruments. See

New Zealand Dollar/Japanese Yen (Nov 2004 – Dec 2005
نتابع

[abdellatif]

What Factors Influence Market
?Sentiment

Interest rates

Trends in interest rates are one of the most significant factors influencing market
sentiment, as interest rates play a huge role affecting the supply and demand
of currencies

Every currency in the world has interest rates attached to them, and these rates are
decided by central banks. For example, the Fed in the US determines the country’s
interest rates; the Bank of Japan (BOJ) sets Japan’s interest rates; the Reserve Bank
of New Zealand (RBNZ) decides on New Zealand’s interest rates and so on. Some
currencies have higher interest rates than others, and these are usually the
currencies that attract the most attention from savvy international investors who are
always looking across the global landscape in the continual search for a better
interest rate yield on fixed-income investments. This, of course, also depends on the
geopolitical or economic risks of that particular currency. Just like when a bank
lends money to a higher-risk borrower, high-risk currencies require a significantly
higher interest rate for investors to consider keeping money in those currencies

?What causes fluctuations in interest rates

The value of money can and does decrease when there is an upward revision of
prices of most goods and services in a country. Generally, when a country’s
economy expands or when energy costs go up, goods ranging from clothing, food
to computers, and services ranging from public transport to spa treatments get more
expensive, thus eroding the value of money. The nice word for this erosion in value
is, of course,

inflation

Controlling inflation

Central banks are responsible for ensuring price stability in their own country, and
one of the ways they employ to fight inflationary pressures is through the setting of
interest rates. If inflation risks are seen to be edging upward in, say, the US, the Fed
would raise the federal funds rate, which is the rate at which banks charge each
other for overnight loans. When the overnight rate is changed, retail banks will
change their prime lending rates accordingly, hence affecting businesses and
individuals. An increase in interest rates is an attempt to make money more
expensive to borrow so that there will be a gradual decrease in demand for that
currency, thus slowing down an overheated economy. The opposite scenario is true
too: when a country faces deflation, or even decreased inflation, which is often the

result of decreased spending, whether by the government, consumers or investors
it prompts the central bank to lower interest rates so as to stimulate spending

Interest rates and currencies

The most important way in which interest rates can influence currency prices is
through the widespread practice of the

carry trade

A carry trade involves the borrowing and subsequent selling of a certain currency
with a relatively low interest rate, then using the funds to buy a currency which
gives a higher interest rate, in an attempt to gain the difference between these two
rates – which is known as the

interest rate differential. The trader is paid interest
on the currency he or she is long in, and must pay interest on the currency he or she
is shorting. This difference is the cost of carry. Therefore, a currency with a higher
interest rate tends to be highly sought after by investors looking for a higher return
on their investments

Rising interest rates in a country tends to strengthen that country’s currency relative
to other currencies as investors exchange other currencies to buy the currency of
that country when they transfer their assets into the country with the higher interest
rates. The increased demand for that particular currency will thus push up the
currency price against other currencies

For instance, in 2005 there was a strong interest among Japanese investors to invest
in New Zealand dollar-denominated assets due to rising interest rates in New
Zealand. The then near-zero interest rates in Japan forced a lot of Japanese
investors to look outside of their country for better yields on cash deposits or fixedincome
instruments. See

New Zealand Dollar/Japanese Yen (Nov 2004 – Dec 2005
نتابع

[abdellatif]

نتابع تأتير سعر الفائدة الموضح على الشارت التالي

[abdellatif]

نتابع تأتير سعر الفائدة الموضح على الشارت التالي