SINGAPORE, SINGAPORE -- (Marketwire) -- 02/28/13 -- Going into March 2013, risk sentiment has taken a break as benchmark indices and risk currencies edged lower last week. Improved German data filed to lift Euro-related assets, Euro Zone aggregate PMI ended its rebound, and in the U.S. Federal Open Market Committee (FOMC) participants worried about high costs and inflation risk from Quantitative Easing, adding uncertainty to the global market.
In his AskMarioSingh.com blog, "Your toughest Forex Questions answered daily" Mario looked at interest rate decisions and Forex, trading before a major news release and identifying fundamental events that cause long-term market trends, the strengthening of the USD and how to trade specific currency pairs, amongst other topics during February.
Said Mario, "Central Bank interest rate increases benefit a country's currency, as they put a cap on inflation. Forex traders may consider going Short if a Central Bank reduces the interest rate, and going Long if a Central Bank increases it."
On trading before a major news release, Mario said that an ongoing trade position before a major news release needs to have a directional bias for a currency through analysis, and a trading plan. "Trading successfully in the long run is about being consistent in execution and having strict money management," he said.
On fundamental events that cause long-term market trends, Mario cited the recent USDJPY rally caused by the weakening JPY due to Prime Minister Shinzo Abe's monetary policies as an example, and said that the key is to marry different market events and economic numbers to form a market bias. "For example," said Mario, "if China's Gross Domestic Product (GDP), trade balance, manufacturing and retail sales show dismal results, it might suggest China's economy is slowing down. This may have a long-term effect on the Australian currency, as China is Australia's biggest export partner."
On the strengthening of the USD when consumer sentiment dropped, Mario cited the EUR and GBP losing value, rather than USD gaining strength. "The U.S. is the largest economy, so when its economic indicators are weak, consequences tend to reverberate around the world," said Mario. "Therefore, investors and institutions could exhibit a "risk off" sentiment and might offload risk currencies, like the EUR, GBP, AUD, CAD and NZD, causing them to fall in value."
On how to trade specific currency pairs, Mario cites relativity: how one currency compares to another. In his new book 17 Proven Currency Trading Strategies: How to Profit in the Forex Market (Wiley Publishing) Mario illustrates how to custom-tailor trading strategies for peoples' different sensibilities and risk tolerances, with illustrations that clearly explain what to look out for and how to apply strategies in a real-time situation.
The views of Mario Sant Singh - who is Director or Training & Education at FXPRIMUS, are widely sought after in the Forex industry. His popular blog, his weekly market webinar, his daily and weekly market reports provide direct channels for some of the best-informed educational resources that new and experienced traders can access to improve their knowledge of Forex and related investment markets.
During February, the top ten Forex trading questions (click the links for the answers) were:
1. How should I trade news releases on employment data? Is there a formula for trading these reports?
2. Why are interest rate decisions a big deal in Forex?
3. Question from Ray: Is it wrong to trade before a major news release?
4. What fundamental events cause long-term market trends like the USDJPY rally?
5. Why did the USD strengthen when consumer sentiment dropped?
6. In your new Forex book, did you write about specific currency pairs and how to trade them?
7. Are there any fixed correlations with Gold, the Dollar and Stock Market?
8. Does higher leverage increase transaction costs?
9. What percentage of profit do I need if I want to scalp when trading Gold?
10. What's your opinion on trading over the weekend? Do you take profits on Friday or hold your trades on the weekend?
Have a new question for Mario? Then ask him online at AskMarioSingh.com, and sign up to receive Mario's Forex Answer of the Day, by email.
ABOUT MARIO SANT SINGH
Mario Singh is the Director of Trading & Education at global retail Forex brokerage FXPRIMUS. He has appeared as a guest expert on CNBC more than 35 times to talk about foreign exchange markets, and is a regular contributor to top investment publications and online portals. Known as a brilliant and intense communicator with a unique ability to 'keep Forex simple' and a mission to help every man-in-the-street to trade profitably and responsibly in the Forex market, more than 20,000 people have attended his Forex trading programs. He is the only Forex trader in Asia invited to train Julius Baer Private Bankers - the third largest Swiss Bank, and ICBC, China's largest commercial bank.
FXPRIMUS offers retail traders a level of trade execution, service quality and fund safety that are normally reserved only for the largest investors. Serving traders in 205 countries across 6 continents FXPRIMUS combines an unmatched level of fund safety with regular independent audits of company financials and Straight Through Processing, top notch execution with tight spreads, prompt and responsive customer support, ISO 27001 certification in Information Security and an industry-leading trader toolset that includes free access to powerful trader tools and personal coaching via FXPRIMUS Coach. FXPRIMUS truly is The Safest Place To Trade.
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