Articles

What is a Flag and Pennant?

A Flag and Pennant is a familiar forex trading pattern characterized by an upward movement with a large slope followed by a period of consolidation. It is considered a bullish pattern overall, as a breakout from the consolidation phase is expected. The formation resembles the outline of a flag, the previous upward trend being the flagpole. The consolidation tends to be sloped in the opposite direction of the slope of the previous trend or simply flat. Resistance and support lines border the consolidation period, thereby suggesting a flag pattern. When the currency resumes its former trend by breaking out of the consolidation phase, the forex trader expects a price objective approximating the length of the “flagpole” measured from the breakout price level. However, even though this pattern is considered “bullish”, the breakout can go either way.

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Where Do Forex Rates Come from?

Stocks are traded on a centralized exchange which facilitates a transparent price discovery mechanism. When stock traders across the globe feed their bid and ask prices, the bid prices are listed in the descending order and the ask prices are listed in an ascending order in the order board. A trade gets executed when the bid and ask prices match each other. That leads to the discovery of the price of a stock. However, a beginner Forex trader would wonder where does the exchange rate of a currency pair come from, as the currency market is a decentralized over-the-counter market. This guide will walk you through the origin of price feed offered by a Forex broker.

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What is Currency Correlation?

It is the ability to understand influential factors is vital to your success as a currency trader. You need to determine the sensitivity level of particular currencies, as well as the currency pairs, in your portfolio; doing so lets you avoid overexposure, recognize diversification opportunities, and double profitable positions.
Remember, currencies are traded in pairs and a single currency in a pair can be paired with a different currency; they are all interdependent. If the value of one currency pair is affected, it means that the value of the other pair is affected, too. The fact that currencies are dependent on other currencies is advantageous.
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Silver trading

Silver has many special features as a commodity. Firstly, it has a huge array of industrial uses. It can be used as electrical components in computers and household appliances such as washing machines. It also has less conventional uses, such as in photograph development and in odour control in shoes and clothes. It is also more commonly being used in trace amounts in bandages and is still used in X-rays. Silver also currently enjoys a relatively low cost when compared to other commodities such as oil and gold. This is in stark contrast to the beliefs espoused by many industry experts: silver is one of the best investments a speculator on the commodity market can make.

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What Is the Carry Trade ?

A carry trade is a strategy in which an investor borrows money at a low interest rate in order to invest in an asset that is likely to provide a higher return. This strategy is very common in the foreign exchange market. For example, in the period up to 2007 many investors borrowed in Japanese yen or Swiss francs, taking advantage of very low interest rates in Japan and Switzerland, and used the money to take long positions in currencies backed by high interest rates, such as the Australian and NewZealand dollars and South African rand.

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