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Thread: Bank Interventions and its Effects

  1. #1
    Rookie nsawork's Avatar
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    Smile Bank Interventions and its Effects

    Hello traders,

    I would like to tell you about the Intervention of the Banks in the Forex markets and its Effects.

    What is a Bank Intervention?
    Each country has a Bank known as its Central Bank whose task is to oversee their country,s Forex rate and Forex reserves. In general a Central Bank of the Nation will hold large Forex Reserves which may be needed in the times of crisis like a Bank Intervention. There are certain times when the economy of the Country is not doing good and the Bank may plan to Enter in the Forex markets in order to Stabilize the Forex rates.

    The Sole Purpose of a Bank Intervention is to benefit its own country but in the Process it makes large movements in the Forex currencies and this causes lots of Gains/ Losses to the Retails FX Traders.

    What is the Catalyst for a Bank Intervention?
    The main Catalyst or the Triggering event that will make a Central Bank to Intervene in the Forex markets can depend on Many factors like the Natural Calamity in the case of Bank of Japan or the need to maintain a Floor rate in the case of the Swiss National Bank. The sole Objective is to Stabilize the financial situation of the country with the Forex reserves.

    How to Benefit from a Bank Intervention?
    When a trader is constantly in touch with the Forex markets and the news he will know that whether or not their is a Potential Catalyst which will cause a Bank to Intervene in the Forex markets. If there are some Indications then he can well plan his trade with a lot of Free margins so that in the case of a large move in the FX markets he will stand to gain a lot of money.

    Which Central Banks are more likely to Intervene?
    • Bank of Japan (BoJ)
    • Swiss National Bank (SNB)
    • European Central Bank (ECB)
    • Reserve Bank of India (RBI)
    • Federal Reserve (Fed)
    • Bank of England (BoE)
    • Reserve Bank of Australia (RBA)
    • Bank of Canada (BoC)
    • Reserve Bank of New Zealand (RBNZ)



    In the On-going discussions i will tell you more about Bank Intervention and its Effects on the Forex markets

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  2. #41
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    there is no mind at all that when the banks . we speak about the central banks see that the economic has many of the mistakes of a state . and the rate of the inflation is not ordinary . these are some of the reasons which push the central banks to make intervention to the matters of the economic and investing

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  3. #42
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    Quote Originally Posted by techboy View Post
    There are always a lot of uncertainties in the market, our strategy dont perform good always all the time, it is important that we stick to our trading rule all the time even if we run into some draw down period, a lot of traders can be badly affected when this situation happen that most of the time lead to making more trading mistakes.
    My trading way is with the strategy that I personally developed and I combined it with good trading plan that includes money management and risk management strategy plus patience and discipline, hardwork and will and determination to survive in forex market.

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  4. #43
    Registered user techboy's Avatar
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    Quote Originally Posted by hosny55 View Post
    there is no mind at all that when the banks . we speak about the central banks see that the economic has many of the mistakes of a state . and the rate of the inflation is not ordinary . these are some of the reasons which push the central banks to make intervention to the matters of the economic and investing
    True, CB in a particular country can interfere in the currency market when they feel it is necessary for the benefits of their own economy and as trader we need to always in the look out when this situation happens because there are huge opportunity to make some profits when this occur.

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    " Trading is 70% Psychology, 15% Risk Management and 15% Strategy ! "

  5. #44
    Rookie nsawork's Avatar
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    Quote Originally Posted by techboy View Post
    True, CB in a particular country can interfere in the currency market when they feel it is necessary for the benefits of their own economy and as trader we need to always in the look out when this situation happens because there are huge opportunity to make some profits when this occur.
    Profits in the Forex markets will come only when we are able to clearly asses the main trends and this is why the knowledge of the Economy and the environment that we have in the markets is very important for us and we need to understand them fully before opening any deals.

    It is only when we are more experienced as a trader and that our trading ability gets tested we will start to perform better in the trading and would be able to identify any type of situation that can arise in the markets

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  6. #45
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    Following news are good and will help a trader to be able to make good amount of money from forex trading, no doubt about that, but then the thing that should be known is that not all news moves the market.

    Therefore there is a need to be patient and learn technical analysis also, to be taken with fundamental analysis when they show up, therefore forex has so many factors that makes the market move.

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  7. #46
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    Quote Originally Posted by splash View Post
    Following news are good and will help a trader to be able to make good amount of money from forex trading, no doubt about that, but then the thing that should be known is that not all news moves the market.

    Therefore there is a need to be patient and learn technical analysis also, to be taken with fundamental analysis when they show up, therefore forex has so many factors that makes the market move.
    News trading is rewarding but also most risky. I lost much money in news trading and as a trader who has lost money learning to trade forex, this forum is definitely an opportunity for me to make money and become a much better trader. I have to correct lots of weak points in me before I can a good trader.

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  8. #47
    Registered user Hukam's Avatar
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    Quote Originally Posted by forexfighter007 View Post
    News trading is rewarding but also most risky. I lost much money in news trading and as a trader who has lost money learning to trade forex, this forum is definitely an opportunity for me to make money and become a much better trader. I have to correct lots of weak points in me before I can a good trader.
    Regular correction in our trading will surely bring good handsome result in forex so that's a very step mate. I would suggest you to write your mistakes on a notebook and solve them in real market trading. Until you don't have a good money making skill till then you can learn in real account by taking very less lot size like 0.01. Robo Forex forum is a great opportunity to all of us it could be our life changer community.

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  9. #48
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    Quote Originally Posted by Hukam View Post
    Regular correction in our trading will surely bring good handsome result in forex so that's a very step mate. I would suggest you to write your mistakes on a notebook and solve them in real market trading. Until you don't have a good money making skill till then you can learn in real account by taking very less lot size like 0.01. Robo Forex forum is a great opportunity to all of us it could be our life changer community.
    Just try to improve them one by one, if we are writing any mistake on notebook then our first step should be to solve them, like this way we can note our mistakes and can solve that one by one. Only writing on notebook would not be helpful, many trader's do that in trading they write their mistakes but never try to act upon those and they regular follow the same mistakes again and again in trading.

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  10. #49
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    Truly what the bank does moves the market. Sure, that is the reason why we should be able to look at some important news so as to know how they will affect the market.

    Well, most banks are just the big players and you know when the big banks are taking action, the rest of the market activities changes, thus, they are the main players.

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  11. #50
    Registered user Quid's Avatar
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    Quote Originally Posted by dkrishnok View Post
    Financial institution surgery simply occur every now and then however the results can be quite substantial as well as all of us can't prevent or even forecast this whenever does it occur, all of us have to end up being meticulous within checking basic information to ensure that we are able to respond appropriately as quickly as possible and steer clear of large manages to lose or even drawdown within our accounts.
    Financial institution like other can think it is the market can be profitable from the financial institution but it need the bank which is liquidity provider,they need to trade imagine you are the bank they will provide liquidity they don't directly in crisis so imagine i am the bank i will not make decision to increase rate without knowing where market should be if the problem happening then what the traders can do in that market condition,the preparation must be done and it is what they should think to happen.

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