rcanessa

I am Raúl Canessa, the founder of Forexdominion.com. As an experienced Forex trader, my passion for investing and algorithmic trading has shaped my professional journey. Over the years, I have dedicated myself to refining my skills in the financial markets, allowing me to share my knowledge and insights through my platform. I am committed to helping others understand the world of trading and develop effective strategies for success in this exciting field.

Theresa May could lose the Brexit vote and the market expects Europe to move

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May could lose brexit vote

Political instability in the UK is assured and will affect the British economy and the rest of the EU, experts say

The market assumes that Theresa May tomorrow will lose the vote on the plan for the departure of the United Kingdom from the European Union that the premier agreed with Brussels. May had agreed to expose a plan B in three days, if the Brexit vote fails tomorrow. Experts and analysts consulted trust that the European Commission can now offer a little hand to prevent uncertainty from going further. This issue, added to the bad macro economic data from China, has caused a fall in European markets.

If the pact does not receive the approval of the Parliament, the Prime Minister will have three days to modify it, something that the experts do not see probable either, and from then on it will be the Parliament that takes control of the Brexit. This can lead to several very different scenarios: that the departure of the UK from the EU is delayed for the parties to continue negotiating (in principle the planned disconnection date is March 29); that new elections be called if the Labor Party manages to take forward a motion of no confidence against the Executive of May or the convocation of a new Brexit referendum.

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How have the main currencies behaved during 2018?

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The year 2018 has been marked by tensions and uncertainty. The commercial war between the United States and China has been carried to its maximum level, the rise of interest rates and QT (quantitative tapering) has continued in the US and in Europe the QE (quantitative easing) has been ended. Towards the end of the year the atmosphere is even more tense with the “gilets jaunes” (yellow vests) in France, the political escalation between the US and China and the fall of the world stock markets. On the other hand, the price of oil is practically at a minimum, although it seems to start to rise, which has helped to reduce the increase in global political-economic tensions.

On the one hand, the low price of oil contains inflation, which reduces the pressure towards the contraction of the monetary stimuli of the main world banks and on the other hand supposes an injection of disposable income for consumers.

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What are exotic currency pairs in the Forex market?

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The Forex market is the largest OTC market in the world, according to some estimates it moves almost 5 trillion dollars a day. Specifically, in the last triennial survey of the BIS, you can observe the level of negotiation and distribution among the main currency pairs that are traded in that market. This tells us clearly why it is the largest market in the world. But the fact is that not all the instruments that are traded in this market are the same. Each pair has its own characteristics and advantages and disadvantages.

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Overlay of the European session and the U.S. session

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Usually the currency markets have the highest trading activity when occur the overlap of the trading sessions of the two most important financial centers in the world: London and New York. In fact, generally the average range of price movement between 8 am and 12 pm EST time, is on average about 70 percent of the average total range of price movement during the European session and 80 percent of the average total range during the U.S. session. Undoubtedly, for all currency pairs this period is usually the most active and volatile, and for this reason is ideal for traders who want to get high profits in the market with fast price movements, ie traders with high tolerance risk.

By themselves, the above percentages indicate that traders who are interested in trading with highly volatile prices and wide price ranges must act precisely during the hours in which the markets of United States and Europe overlap, especially if they are unable to monitor the market all day.

Trading Systems Based on Moving Averages and MACD

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This is a trading strategy that can provide gains of between 20-30 pips per trade so it can be quite profitable. This trading system is very simple to use and its signals are easy to follow. The main features of this strategy are the following:

This is a trading system that combine the use of two well known technical indicators: moving averages and MACD. Also, the trader can use the Momentum indicator to confirm the trend direction. Basically, this system attempts to profit from changes in the market trend. The MACD and the Momentum are necessary because the moving averages crosses are not too reliable signals.

Indirect quotation and direct quotation – Forex

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What is an indirect quote?

Is the price of a currency pair expressed as amount of foreign currency per unit of domestic currency.

In other words, when an indirect quote is given, the exchange rate is expressed relative to a fixed  amount of the national currency (1 unit),  while the amount of foreign currency is variable.

For example, if we are in the United States, the indirect quote for the Canadian dollar would be 1.17 CAD = 1 USD, so the exchange rate of the indirect quotation is expressed as USD/CAD 1.17 because it is the expression that reports the amount of CAD per unit of USD which is the national currency (for 1 USD we can obtain 1.17 CAD). If we were in Canada the indirect quotation of the US dollar would be 0.85 USD = 1 CAD (CAD/USD 0.85 indicates that for 1 CAD, which is the national currency, we get 0.85 USD). As we can see, in an indirect quote the base currency of the currency pair is the national currency.

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How to start trading Forex if you are a beginner?

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Start trading in Forex
Start trading in Forex
To trade Forex, you need to have a strategy to take advantage of the rapid changes and market conditions. There is no short way to develop a strategy because it is necessary to test it in different situations. This means that every trader must invest considerable time analyzing charts, reading news, and keeping updated with the economic announcements. If you are a novice trader, you can follow the following tips to start trading Forex.

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Base Currency and Quote Currency

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In this article we will define two basic concepts for trading in Forex: the base currency and the quote currency.

What is the base currency?

The base currency is the first currency listed in a currency pair traded in the Forex market. Sometimes you can also see this term as primary currency (although this term is not very suitable for its meaning in economics). In accounting base currency is the one used to represent all company accounts.

For example, if we have the pair EUR/USD, the euro (EUR) is the base currency and the US dollar (USD) is the quote currency or counter currency. The price given for the pair represents how much is needed of the quote currency to buy one unit of the base currency or, which is the same, how much of the quote currency can be obtained when one unit of base currency is sold.

Long-Term Prediction Models of Exchange Rates in the Forex market

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In this article we will examine the different models used in fundamental analysis to predict changes in currency prices which are used by analysts of the most important investment banks. These models may be of interest to all traders who want to increase their knowledge regarding fundamental analysis applied to the Forex market. Currently there are seven main models for forecasting exchange rates:

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