Bank Interventions and its Effects
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Thread: Bank Interventions and its Effects

  1. #1
    Trader 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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    this is a good time for us to discuss about bank intervention and how the impact to the market, i just know it for a little, and the time right now to know it deeply
    i just know that benefits from bank intervention. maybe we can see the market condition and take the moment to enter the market at the right points, we will know when the market will move up or down too
    but, we have to pay attention for investor reaction based on the country's policies which give the intervention to the market
    several times my country try to intervene the market to keep stable the currency, but the impact is not give enough effect in the market, and it was caused by some policies too where the investor will see it as a good sentiment or bad one

  3. #3
    Trader nsawork's Avatar
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    Quote Originally Posted by newentry View Post
    this is a good time for us to discuss about bank intervention and how the impact to the market, i just know it for a little, and the time right now to know it deeply
    i just know that benefits from bank intervention. maybe we can see the market condition and take the moment to enter the market at the right points, we will know when the market will move up or down too
    but, we have to pay attention for investor reaction based on the country's policies which give the intervention to the market
    several times my country try to intervene the market to keep stable the currency, but the impact is not give enough effect in the market, and it was caused by some policies too where the investor will see it as a good sentiment or bad one
    Yes this is why we have to know the effects of a Bank intervention and how we would be able to deal with them. If we know what are the main factors that causes a Bank intervention then we get into a better position and thus we are better able to deal in the currency pairs in our trading accounts. This is also because when we will usually see a Bank intervention taking place we have to also consider about whether or not we are going to benefit from it.

    And this we will come to know only when we will start to Fully understand its effects

  4. #4
    Quote Originally Posted by nsawork View Post
    Yes this is why we have to know the effects of a Bank intervention and how we would be able to deal with them. If we know what are the main factors that causes a Bank intervention then we get into a better position and thus we are better able to deal in the currency pairs in our trading accounts. This is also because when we will usually see a Bank intervention taking place we have to also consider about whether or not we are going to benefit from it.

    And this we will come to know only when we will start to Fully understand its effects

    We can do the analysis and know where the market is going. Then its just opening trades and earning. Any adult person can work in Forex. It is good for those people who are not able to go out for working. We can work easily at home . We can earn from home. It makes easy to our life.

  5. #5
    Trader nsawork's Avatar
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    Quote Originally Posted by AmitChallenger View Post
    We can do the analysis and know where the market is going. Then its just opening trades and earning. Any adult person can work in Forex. It is good for those people who are not able to go out for working. We can work easily at home . We can earn from home. It makes easy to our life.
    Most of the Forex traders are not putting more efforts on doing their trading analysis correctly. We should know that if our trading is not giving us the results as we have expected then we must wait till the right time and then see.

    Talking about the Intervention of the Banks in the Forex markets it is very much important for us to know how they are going to have an effect on our trading and what are the potential benefits of doing trading at those times

  6. #6
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    Quote Originally Posted by nsawork View Post
    Most of the Forex traders are not putting more efforts on doing their trading analysis correctly. We should know that if our trading is not giving us the results as we have expected then we must wait till the right time and then see.

    Talking about the Intervention of the Banks in the Forex markets it is very much important for us to know how they are going to have an effect on our trading and what are the potential benefits of doing trading at those times
    That's right we really need to put effort in our analysis and the good thing about trading the pair we are familiar ( the best is if we can trade our own country currency are we are more aware of the economic and banking situation in our country) is that we can monitor the bank intervention. Like for example in our country if the Philippine Peso reach 45 PHP to US dollars usually our central bank sell US dollars so that the value of Peso will not depreciate much and if the Peso become strong and hit 39 pesos to US dollars our central bank buy the excess US dollars to weaken our currency.

  7. #7
    Quote Originally Posted by nsawork View Post
    Most of the Forex traders are not putting more efforts on doing their trading analysis correctly. We should know that if our trading is not giving us the results as we have expected then we must wait till the right time and then see.

    Talking about the Intervention of the Banks in the Forex markets it is very much important for us to know how they are going to have an effect on our trading and what are the potential benefits of doing trading at those times
    Its very simple mate if we are not getting any satisfaction from our trading system then we have to change it and should test another one for couple of months. There are many trading methods which we can choose for trading. Personally I would suggest everyone to use technical analysis in their trading. Along with it I am agree with you that Bank is one of the important factor of fundamental analysis in this business.

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    Quote Originally Posted by Hukam View Post
    Its very simple mate if we are not getting any satisfaction from our trading system then we have to change it and should test another one for couple of months. There are many trading methods which we can choose for trading. Personally I would suggest everyone to use technical analysis in their trading. Along with it I am agree with you that Bank is one of the important factor of fundamental analysis in this business.
    i guess there is no problem to learn fundamental too, so they will understand the market condition and try to follow, but as the basic, technical analysis is recommended, at this side, they learn how to set lots size, stop loss, indicate support resistance and many more and then become a good thing if they can combine it with fundamental analysis

  9. #9
    Bank interventions just happen once in a while but the effects can be very significant and we cannot avoid or predict it when will it happen, we just have to be vigilant in monitoring fundamental news so that we can react accordingly as soon as possible and avoid huge loses or drawdown in our account.
    " Trading is 70% Psychology, 15% Risk Management and 15% Strategy ! "

  10. #10
    Trader nsawork's Avatar
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    Quote Originally Posted by newentry View Post
    i guess there is no problem to learn fundamental too, so they will understand the market condition and try to follow, but as the basic, technical analysis is recommended, at this side, they learn how to set lots size, stop loss, indicate support resistance and many more and then become a good thing if they can combine it with fundamental analysis
    Yes it is a given fact that when our trading knowledge will remain good we will be able to do much better trading on an average and this will also give us more income thru our trading. We must also try to understand this fact that in trading income is what decides whether we are going to become successful in our trading venture or not.

    And so the Potentials for a Bank Intervention must be looked upon as we will get to know more about them we can easily try to understand the effects we have of such a Impact on the Currencies in general

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