Trading The US Dollar
 

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Trading The US Dollar

The most profitable activity for many traders in the last month has been trading the US dollar. The dollar out performed stocks, which fell of late, and certainly out performed gold futures, which have dropped $300 an ounce since their recent high. Selling gold has been more the order of the day than buying the shiny stuff. In trading the US dollar traders use fundamental and technical analysis of currency pairs such as the EUR/USD, USD/YEN, or USD/GBP. With Candlestick patterns as a guide currency traders buy and sell one foreign currency versus another in search of profits.

Trading the US dollar in the Forex market is primarily the business of companies doing business internationally. If a US company purchases machine parts manufactured in Germany they will typically need to convert their dollars and pay with Euros. In order to reduce the risk of changes in currency rates in such a case the US company will often hedge their currency risk by buying calls on the Euro with US dollars. If the Euro falls in value the company need not execute the contract and will simply pay less in dollars for their purchase. If the Euro recovers the company will execute the contract in order to pay the expected price in dollars for their purchase. Trading the US dollar in this case is a matter of hedging currency risk and is a necessary aspect of foreign trade. However, not all traders of foreign currencies do business internationally. Anyone willing to learn the ropes of trading Forex can profit from trading the US dollar or other currencies. Traders familiar with Candlestick analysis will find this technical analysis tool just as valuable in trading the US dollar versus the Yen, British Pounds, Swiss franc, Euro, Australian dollar or Canadian dollar as it is in trading stocks and commodities.

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Trading The US Dollar Presentation Transcript

  • 1. www.CandlestickForums.comwww.CandlestickForums.com Trading the USTrading the US DollarDollar
  • 2. www.CandlestickForums.comwww.CandlestickForums.com The most profitable activity for many traders in the last month has been trading the US dollar.
  • 3. www.CandlestickForums.comwww.CandlestickForums.com The dollar out performed stocks, which fell of late, and certainly out performed gold futures, which have dropped $300 an ounce since their recent high.
  • 4. Before We Continue… Click the links below to get your FREE training materials. Free Weekly Investing Webinars Don’t miss these free training events! http://www.profitableinvestingtips.com /free-webinar Forex Conspiracy Report Read every word of this report! http://www.forexconspiracyreport.com
  • 5. www.CandlestickForums.comwww.CandlestickForums.com Selling gold has been more the order of the day than buying the shiny stuff.
  • 6. www.CandlestickForums.comwww.CandlestickForums.com In trading the US dollar traders use fundamental and technical analysis of currency pairs such as the EUR/USD, USD/YEN, or USD/GBP.
  • 7. www.CandlestickForums.comwww.CandlestickForums.com With Candlestick patterns as a guide currency traders buy and sell one foreign currency versus another in search of profits.
  • 8. www.CandlestickForums.comwww.CandlestickForums.com Trading the US dollar in the Forex market is primarily the business of companies doing business internationally.
  • 9. www.CandlestickForums.comwww.CandlestickForums.com If a US company purchases machine parts manufactured in Germany they will typically need to convert their dollars and pay with Euros.
  • 10. www.CandlestickForums.comwww.CandlestickForums.com In order to reduce the risk of changes in currency rates in such a case the US company will often hedge their currency risk by buying calls on the Euro with US dollars.
  • 11. www.CandlestickForums.comwww.CandlestickForums.com If the Euro falls in value the company need not execute the contract and will simply pay less in dollars for their purchase.
  • 12. www.CandlestickForums.comwww.CandlestickForums.com If the Euro recovers the company will execute the contract in order to pay the expected price in dollars for their purchase.
  • 13. www.CandlestickForums.comwww.CandlestickForums.com Trading the US dollar in this case is a matter of hedging currency risk and is a necessary aspect of foreign trade.
  • 14. www.CandlestickForums.comwww.CandlestickForums.com However, not all traders of foreign currencies do business internationally.
  • 15. www.CandlestickForums.comwww.CandlestickForums.com Anyone willing to learn the ropes of trading Forex can profit from trading the US dollar or other currencies.
  • 16. www.CandlestickForums.comwww.CandlestickForums.com Traders familiar with Candlestick analysis will find this technical analysis tool just as valuable in trading the US dollar versus the Yen, British Pounds, Swiss franc, Euro, Australian dollar or Canadian dollar as it is in trading stocks and commodities.
  • 17. www.CandlestickForums.comwww.CandlestickForums.com Currency trading is not limited to pairs including the US dollar.
  • 18. www.CandlestickForums.comwww.CandlestickForums.com However, the greenback is used in roughly 85 percent of all Forex transactions.
  • 19. www.CandlestickForums.comwww.CandlestickForums.com In fact, many minor currencies are not traded against each other.
  • 20. www.CandlestickForums.comwww.CandlestickForums.com To convert one minor currency into another one trades the first currency to purchase dollars and then uses the dollars to buy the second currency.
  • 21. www.CandlestickForums.comwww.CandlestickForums.com Trading the US dollar has been profitable in the last month as the dollar has risen against all major, and virtually all minor, currencies.
  • 22. www.CandlestickForums.comwww.CandlestickForums.com currencies. Fundamental analysis tells part of the story.
  • 23. www.CandlestickForums.comwww.CandlestickForums.com There is a general concern that the European Union will not solve its sovereign debt dilemma and that Greece, followed by Italy and others will default on national debt. Industrial production is down across the world.
  • 24. www.CandlestickForums.comwww.CandlestickForums.com In times of economic turmoil there is generally a flight to safe haven currencies including the US dollar.
  • 25. www.CandlestickForums.comwww.CandlestickForums.com The Swiss franc and Yen might be options but both nations are selling their currencies in order to avoid having their currencies become overpriced.
  • 26. www.CandlestickForums.comwww.CandlestickForums.com Technical analysis with Candlestick charts helps tell the rest of the story.
  • 27. www.CandlestickForums.comwww.CandlestickForums.com In the currency market there are waves of trader sentiment that may, at times, seem to be at odds with fundamentals.
  • 28. www.CandlestickForums.comwww.CandlestickForums.com Using Candlestick pattern formations and Candlestick trading tactics, currency traders can successfully anticipate and profit from changes in rates when trading the US dollar or other currencies.