News & analysis
News & analysis
Free Forex Software
History of money
News are one of the main elements on which are formed the prices of the stock exchange. This is also valid for the value of the currencies that are traded on Forex. It would be logical
that the stock prices and currencies were based on the strength of the society issuing the shares, or on the reliability of country which guarantees the value of its currency. But these
true values are often overshadowed and playing a marginal role, while the speculation comes into the foreground; this is the main reason for the panic or euphoria, which often govern
the financial markets.
In business one of the very important factors that greatly affect the affairs, is the trust. If we go into the store we already know well and we were always happy with the purchase, we will feel better and spend less time to buy what we want. Otherwise, going into an unknown place, we will lose more time to see if it is trustworthy, if the goods are good and the prices fair. If our conclusion is negative, we will leave the store without buying anything and we will go in search of another. The element of trust is also valid in the global market. If we do not trust a state, we will invest our money in the bonds of another, where we will feel safer and where they will ensure us that, in the future, when the bonds expire, we would have back the amount of money expected.
On what is gained confidence in a company's shares or a coin? On the state of the accounts, debt, of the economic status, or the business plan of the society. They are the actual indicators that, combined together should enable to a trader to make a correct choice; to buy or to sell, or maybe stay away from the financial asset related to this subject. We, mere mortals, have very limited information on the details of running a business, or on the accounts of a countries. Because the details are often strong motivations to make decisions, maybe the opposite to what we would do analyzing the global, known situation. Those who have the complete information are a few, auditors, banks and politicians. Sometimes their outing become news. The information provided is often interpreted by journalists, and occasionally can be completely distorted. By chance, or deliberately. A news could bring a lot of money to someone who knows the background of the real state of things.
We have evidences that in history there were many false news that caused real financial earthquakes; someone has intentionally misinformed the public to make a profit. It would seem that in today's times this danger is not so much present. Thanks to the global network is easier to check the veracity of the news, by consulting other sources. But it is also true that internet allows almost anyone to enter the data that may be false.
Many enthusiasts Forex traders argue that to be a successful trader we must be well informed, reading and listening a lot; surely they are right. We just have to be careful and not always believe in an absolute way to what someone want to spread as an objectivity. We should always twisted and turned the medal, to see it from all sides before investing the money. Apart from the authenticity of the information, there is another serious problem for those who base their strategies only on news: the timeliness of the moment. It often happens that when one news comes in the public domain in fact has already caused the effects that is expected and many, those who have received it late, risk losing the money, because the market has already gone over.