CRS - RL31985 - Weak Dollar, Strong Dollar: Causes and Consequences
Strong Dollar Weak Dollar
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Transcript of Strong Dollar Weak Dollar
There is circularity to trading Forex which we refer to as strong dollar weak
dollar.
http://www.theforexnittygritty.com/forex-trading/strong-dollar-weak-dollar
How to trade Forex is to buy the dollar when it is weak and sell when it is
strong.
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This Forex trading strategy works in channel trading but not so well during
long established trends.
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Accurate technical analysis of Forex pairs leads to profits.
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And trading based on what the market has been doing often leads to an
adjustment of the market and a move in the opposite direction.
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To the extent that there are no major fundamentals driving the market there
can be changes that beget changes, the strong dollar weak dollar effect.
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The question for a Forex trader is how to make money at such times.
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Technical Analysisand Profits
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Technical analysis of major Forex currencies
is usually quite accurate.http://
www.theforexnittygritty.com/forex-trading/strong-dollar-weak-dollar
These currencies trade in high volume and excellent liquidity.
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As such technical indicators can be highly predictive.
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In order to profit a trader needs to follow the market closely and respond
to usually small moves.
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A time honored system was developed for trading rice in Japan in the days of the Samurai, Japanese Candlesticks.
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The use of these patterns allows many traders to accurately predict changes in
market sentiment.
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Traders benefit from candlestick patterns in Forex trading
because they are based on real market history and are highly predictive of
future trends.
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An example if the Doji signal. This nearly flat candle with upper and lower
shadows of varying lengths tells us that the market is undecided.
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In a flat market this information is of little use. However, with the strong
dollar weak dollar oscillation effect the Doji can tell a trader that an upward
trend is about to head down and that a downward trend is about to head up.
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Numerous other Candlestick signals help predict market reversal.
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One reads the first part of a time tested pattern and can reasonably expect that the next part of the pattern will occur.
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During a strong dollar weak dollar oscillation these patterns can lead to
tidy profits.
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Fundamentals And The Strong Dollar Weak Dollar
Effecthttp://
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We have commented on these pages that the debt crisis in Europe can lead
to a weaker Euro.
http://www.theforexnittygritty.com/forex-trading/strong-dollar-weak-dollar
This can in turn lead to increased exports from Europe, higher
employment, and increased profits.
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The end result can be a recovered and higher Euro.
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The same applies to the Yen, British Pound, or any other major currency.
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The strong dollar weak dollar phenomenon is not limited to just the
US dollar and is not limited to short term fluctuations.
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However, to profit from the strong dollar weak dollar effect in the realm of
fundamentals one needs to do more than just a little homework.
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In addition it is important to see through the chaff of economic and
fiscal policy and the tendency of central banks to manipulate the markets via
bluff and bluster.
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A Cautionhttp://
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Technical analysis of minor Forex currencies is not nearly as accurate as analysis of
major currencies.http://
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As such it is difficult to take advantage of the so called strong dollar weak
dollar effect in trading minor currencies.
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Because most minor currencies only trade against the dollar, a stable minor can be traded with only the greenback
in mind, however.
http://www.theforexnittygritty.com/forex-trading/strong-dollar-weak-dollar