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.

The Driver - Part 1

Hi guys,

How you guys been holding up till now? Good? Not good? Not good but not not good?

I'm sure everything will be just fine for you guys. May you guys be blessed.

So today (i think i'm going to write this and save and continue write and save a several time),

We are going to discuss about who drives the market.

Buyers & Sellers.

Remember how I explain the market move from past to present, and those customers/suppliers how they could affects your economic growth?

We will try to dig in and investigate who are they in FOREX market.

When I described what FOREX mean, i meant by "Currency Exchange" . Foreign Currency Exchange to describe the whole thing. Thus, the term Currency.

So who drives the currency? Can a currency get strong/weak when someone buy/sell the money?

Lets take a very recent event as our example shall we?



US Presidential Election.

Euro pound vs US dollar

What did you all see?

(1)- You guys noticed the first zone where it spike up?
(2)- And suddenly spike down;
(3)- Gradually move downwards since then.

Here how i could explain (To my knowledge and readings)

Rumors said IF Mr Trump won the election, the US dollar will weaken; vice versa,

Mrs Clinton won, US dollar strengthen.

WHY?
-This was because all the time the US government was organized by democratic party.
-The investors were confident with the policies (which was established very long time already) created and maintained by the government.
-The investors never like changes, especially to the policies that they are holding on for such a long period of time.What if the terms changed? What if those terms were not in their favor?
-When an organization which established by the democratic, suddenly hand over to the republican party, it means everything's changing. - which leads to previous point.
-The investors will have second thought, doubt, anxious, towards their money which already in that particular country. What will they do after that?
-They will take back and called off the deal.
-When a country lost investors, they lost their customers! >>>  BAD PROFIT!!! US Dollar will DROP!!!

When Mr Trump had the lead in votes, those investors were having trouble, anxious, doubt towards the organization what will become, which leads to the zone (1) spike up.

Now why it's spiked up? Weren't it dropped? Spikes down?

This is because the chart is illustrates Euro pound vs US dollar, when US dollar weaken, the Euro gained advantages > strengthen their pounds > spike up!!

There are 4 scenarios can be interpret in the chart Euro pound versus US dollar.

Remember when we were in school learning mathematics?

Imagine...

The Price (C) can be manipulated through 4 conditions.

1-Price ↑ when Euro pound strong (↑).

2-Price ↑ when US dollar weak (↓).

3-Price ↓ when Euro pound weak (↓).

4-Price ↓ when US dollar strong (↑).

You guys cool?

Now it make sense huh why it spiked up.

But
why the dollar strengthen back at the end of the day? Weren't it supposed to weaken??? Because he won~

This is how Trump attracts all the investors.  The power of speech
His words, his confidence to make American great again, he succeeded in continue the deals with investors. More customers, more profit, more strong.

That's how the chart spiked down and continued its journey to south.


Investors = Customers = Buyers / Sellers

Now you all get it who's the driver of the market now?

OR

Who the hell are those investors?