benicio

how should i know if a currency will strengthen?
sorry too newbie here. i just follow your videos and reached here.

Thank

 

Simit Patel

hi benicio,

welcome to informedtrades!

well, IMHO, there is not a simple answer to your question. i think if you spend some time studying in informedtrades university, you will get a better idea of how to read what buyers and sellers are doing, as well as how economic events can affect a currency's value.

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Tekmnd

Hi Benicio

Here are some things that will make a currency stronger-

A strong economy
A sound monetary (central bank) policy
Low debt to income ratio (in other words, the gov doesn't owe too much)
A trade surplus (the country exports more than it imports)
Higher interest rates (money will flow into the country from foreign investors seeking higher returns)

Cheers
Tek

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spiguru4u

In addition to what Tek mentioned, a currencies strenght is help by having plenty of backing especially gold in the vault or oil in the well

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Abhinav Asthana

Benicio!

You're at the right place. Devote some time in learning and you will soon realize your paths. This website has the best database and great materials you will ever come across in internet. You will enjoy being here.

@Tek & Spi,
Great Precise reply!

Regards,
Abhinav Asthana

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bkelly23

to put it simply, a currency will strengthen if accumulation has occurred ("professionals"/"smart $" got out of their short positions, and accumulated a long position)
now the question becomes "how should i know if accumulation has occurred?"

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forexer

This will be true for stocks but cannot be said for currencies and interest rates likewise. These markets are too huge and liquid and cannot be moved by even sectors of monies. In the past, during the 1990s, Soros could move the pound because FX was underdeveloped. Now, only the central banks (not all) can move their currencies. Fundamentals first, the smart money concept blends in with the core fundamentals of currencies: Interest rates (carry), trade balances, and stability. IMO

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Abhinav Asthana

Exactly! Forexer is right.

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bkelly23

interesting... makes sense, but i still think if you see professional accumulation that is a strong sign that markets will strengthen, maybe not immediately but in the near future.
looks like i have some homework to do

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Abhinav Asthana

You are also right in one way my friend. If you mean that it is the "volume" which makes a price move, then you're right. Volumes do have affects in trades. I guess that is what you mean when you say "accumulation".

Regards,
Abhinav Asthana

Thank