Octa Contests

According to a study by the Bank of International Settlements that was originally published in 2013 and revised in 2016 about client flows in forex trading, the flow of institutional traders reflects a significantly superior alignment with future pricing than that of corporate and private traders' flows. To put it simply, the power imbalance in forex trading gives a huge advantage to institutional traders.

Their order flow is usually so powerful that it can drive the price to move in a certain direction, hence creating a trend. But don't lose hope just yet because fortunately, there is still a way to analyze market sentiment for retail traders, and that is through the Commitment of Traders data report.

Continue Reading at Guide to Analyzing Trend Based on COT Data

Purchasing Managers Index, or what is known as PMI, is an economic report that draws conclusions from business surveys and indicates the business climate in a certain country during a particular period. They usually survey several private companies in the country and track indicators like new orders, production, employment, supplier deliveries, etc. In this regard, PMI is often seen as more comprehensive and useful than ordinary economic data such as GDP (Gross Domestic Product).

Continue Reading at Guide to PMI Data in Forex Analysis

Interest rates add value to every country's currency. Higher interest rates in relation to a currency means it offers relatively higher return compared to any other currency. This way, the higher interest rates in a country, the demand for their currency will rise too because investors will want to have them.

The opposite may happen with lower interest rates. When a country's central bank lowers interest rates, the exchange rates will undergo depreciation. For instance, the Reserve Bank of Australia (RBA) cut their interest rates twice in 2013. Even further, until December of that year, the governor repeatedly mentioned the possibility of a third cut. As a result, AUD became one of the worst major in 2013, having entered a bearish trend that went on until 2014.

Continue Reading at Central Bank Policies That Affect the Forex Market

PMI comes on a scale of 100, with a median of 50. Any number under 50 means the economy is in contraction, while over 50 suggests business expansion. A decrease could be read as an economic decline during the period, while an increase shows ongoing recovery.

Continue Reading at Guide to PMI Data in Forex Analysis