Markets do not exist in isolation and to learn FOREX well you must understand that stocks and shares, bonds, futures, indices, commodities and FOREX are all interconnected. The world is becoming more and more connected. It is very easy for individual traders and large trading institutions to move funds between different tradable items. The economies of the world are also closely linked, as the most recent crash in 2008 showed very impressively.
There is an entire branch of trading called Inter-Market Analysis in which traders study the relationships between different trading instruments. The intention is to find correlations that can help predict future movement in the markets and make money. Many of the correlations relate to risk perception and where money is moving at any given time. The big players can move their investments very quickly to where they think they will get higher returns or more security.
What types of correlations are there and why do they work?
Well, let’s take some examples.
Inflation & Gold
If there is a perception in the market that price inflation is increasing, then if traders do nothing, the value of their money will go down. sparen One of the favorite instruments to invest in right now is gold. You can see this currently (April 2011) where the price of gold is steadily increasing because it is seen as a hedge against inflation. In other words, investors buy gold to make up for the value of their money, which declines over time.
Oil vs US Dollar
There is, or appears to be, an inverse relationship between the value of the US dollar and oil. Why should this happen? Well, there are many theories like:
- a) As the value of the dollar falls, the price of dollar-denominated commodities has risen.
this will worsen its trade deficit and this will weaken the value of its currency.
- c) The dollar as a reserve currency for oil purchases is coming under pressure, other alternatives such as the euro are gaining in importance. This has started to erode the value of the dollar.
I suspect it could be a mix of all of these examples and others. The important point is that when we trade, we as traders can benefit. Due to the fact that Canada is a major oil exporter, there is also a correlation between the Canadian CAD and the price of oil.
AUD (Australian Dollar) and GOLD
The AUD has a relationship with the price of GOLD as Australia is a major exporter of gold. So the more the country can sell, the better its trade deficit will be and the value of its currency will increase. Because the New Zealand economy is so closely linked to Australia’s, there is also a strong correlation between the value of the NZD and the price of gold.
In summary , it is important to understand these relationships as they can help you strengthen your analysis for a specific currency pair. This is another conjunction; If your charts are telling you that EURUSD is falling and you can see oil prices rising, then that is supporting evidence. For more information click on the link below.
Making money with the government – how to do it
Many people wonder how to make money from the government. They tend to think that the United States government is giving money away willingly. That’s not far from the truth. Many government organizations provide funding for researchers and individuals pursuing advanced degrees. In addition, funds are available for those who really need them to change their financial situation. There are set criteria for receiving these funds. You must first determine if you fully meet the criteria. The application must be submitted along with other required supporting documents.
Apply conditions in full
Government grants are available to you, but only if you can meet the criteria. Government agencies offer loans and funds to people starting a new business. Before you apply, you should first try to fully understand the application requirements. Some people can benefit from disability income. It is for those who are housebound and cannot go out because of physical problems to earn a lot.
Some of you who are self-employed also have some support options available. Eligibility depends on the financial situation of the company. If the money earned is not enough, applications for such assistance can be made. Credits are available for purchasing business-related equipment. Finally, it is important to never lose sight of the fact that government funds should be viewed as loans and should not be relied on. You won’t get government money forever. You should find ways to make money or grow your business.
here is, or appears to be, an inverse relationship between the value of the US dollar and oil. Why should this happen? Well, there are many theories like: