The Driver - Part 2

Hi-llo, fellas..

How's your weekend going? Good?

Remember, always spend your time with your loved one no matter how busy you are.


So, you guys know already who are the investors that drives the FOREX market?



Here a little did I know about them.

Last post I mentioned the term Currency , like US, they have dollar ; British, they have pound ; Japan have yen ; and so on.

The currency is a country's strength, 1 of the factor is the ECONOMY.

Basically, when a country's economy growth is good → currency is good, strong, strengthen. (last post i mentioned the correlation between country A and country B resulted in an exchange rate.)

Simply put, the country itself drives the currency market. Indirectly speaking, those who contribute to a country's economy are the actual driver.


Who are these contributor? YOU!

Yes, the human (of course, bruth~)

I give you an example,

When you travel to a foreign country, you will likely hood make an exchange rate right? Indirectly, you're helping your country invest. (well, in this case, we always loss when change back the rate right?)

So, when you travel to Japan, you change your dollar to yen, but you loss when you change back to dollar. → means you are helping Japanese yen to grow stronger.

Same thing goes to Japanese travel to our country, they are the one helping our country's currency grow stronger because they spent money in our country, they are our customers.


Well, that's not the only driver. There's
-FOREX trader just like me, FX trader are investor, they invest capital in the market.
-Bank, same as trader, investor.
-Tax.
-Inflation.
-Interest.
-Politics Affairs
-International Trades (Export & Import)
-etc.

Above mentioned are also the market driver.

Maybe you guys still haven't clear the mind yet. I will pick another driver to explain.
You noticed the term, tax and interest are actually bank's language right?

I will try my best to explain,

Situation A

When the tax and interest goes up on the milk, making the milk more expensive. Will you buy the milk more or less?


Situation B

When the tax and interest goes down on the milk, making it more cheaper. Will you buy the milk more or less?



You get what I mean?

The result will be, when you don't buy the milk, their economy goes down and loss in profit.
These situation leads to lessen tax paid to the government by the producer.
Leads to the government has less income, less income, less investment.

LESS INVESTMENT → COUNTRY ECONOMY GOING BAD → CURRENCY WEAKENED

So how are you guys doing?

Seat tight and relax.

Next post I will introduce the market layout.


May you guys be blessed.