Mindblown: a blog about philosophy.
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Supply And Damand In Forex
Prices of goods, commodities and exchange rates are determined on open markets under the control of two forces, supply and demand. The laws of supply and demand show that: The value of a nation’s currency, under a floating exchange rate, is determined by the interaction of supply and demand. We will work through some charts…
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Factors That Affect Supply And Demand In Forex
A variety of actors cause currencies to experience changes in supply and demand: Who Comprises the Forex market? Due to its vast volume and large number of participants, no individual or single company has complete control over which way the market will sway. Historically, Forex has been dominated by commercial banks, money portfolio managers, money…
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Central Banks and Forex
Floating vs. Fixed Exchange Rates There are two types of exchange rate systems: floating or fixed. A floating exchange rate is one in which a currency’s value is determined by market forces. A fixed exchange rate matches, “pegs”, the value of the currency to: one currency, several currencies or even to a fixed amount of…
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The Importance Of Interest Rates To Forex
Interest rates play the most important role in moving the prices of currencies in the foreign exchange market. As the institutions that set interest rates, central banks are therefore the most influential actors. Interest rates dictate flows of investment. Since currencies are the representations of a country’s economy, differences in interest rates affect the relative…
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The Role of Central Banks In Interest Rates
Central Banks Set Interest Rates Since central banks, also known as reserve banks, play the crucial role of setting interest rates they need to be followed and studied by a fundamental (and even technical) Forex trader. Central banks want to achieve financial stability of their currency (i.e. battle inflation) and maintain overall economic growth in…
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What Are CFDs
CFD stands for Contract for Difference, which is a popular financial instrument used for trading various assets such as stocks, commodities, currencies, and indices. In a CFD trade, the buyer and seller agree to exchange the difference between the opening and closing price of a particular asset. For example, if you buy a CFD on…
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What Underlying Assets Are Used For CFDs?
Contracts for Difference (CFDs) are financial derivatives that allow traders to speculate on the price movements of various underlying assets without actually owning the assets themselves. The trader makes a bet on whether the asset is going to rise or fall in value, without considering the actual value of the asset. CFDs can be taken…
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How To Trade CFDs
CFD trading involves the buying or selling of a contract for difference (CFD) on an underlying asset such as a stock, commodity, index or currency. Here are the general steps to trade CFDs: It’s important to remember that CFD trading carries significant risks due to the use of leverage, and it’s essential to have a…
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The Mechanics Of CFDs
A Contract for Difference (CFD) is a financial derivative instrument that allows traders and investors to speculate on the price movements of various underlying assets, such as stocks, commodities, indices, and currencies, without actually owning the underlying asset. Here are the key mechanics of a CFD: It’s important to note that CFD trading carries a…
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