Forex Market Commentary
Understanding how yield curves work is a very important basis to 
understanding how the currency markets work. There is a very dangerous assumption going around the internet that traders can make money off the back
of news releases and given the volatile nature of the currency markets,
waiting for such rapid changes becomes an opportunity to make some very
quick money. Nothing can be further from the truth and day trading in
such manner is very much akin to throwing your money away at a casino.
understanding how the currency markets work. There is a very dangerous assumption going around the internet that traders can make money off the back
of news releases and given the volatile nature of the currency markets,
waiting for such rapid changes becomes an opportunity to make some very
quick money. Nothing can be further from the truth and day trading in
such manner is very much akin to throwing your money away at a casino.
There are 2 key ingredients to a successful trading career:
1. Education
2. Self -Discipline.
Coming to the aspect of education there are several key economic topics which must be learnt thoroughly before a trader could venture into the currency markets and attempt to carve out a career.
1. Yield Curve Analysis and Monetary Economics.
2. Micro Economic studies.
3. Macro Economic studies.
Yield Curve analysis covers the interest rate, or the cost of borrowing base rate, over a period of time from the current to the future. The shape of curve extending forward in time is effectively known as the Forward Yield Curve. Understanding how the Forward Yield Curve functions helps the trader to understand the relative value of the currency.
In the case of USA for example, you may be able to check the daily forward rate from the US Treasury website at:
A casual glance at the forward dates will easily demonstrate to the reader that the further you go out in time the more expensive the cost of borrowing becomes to compensate risk.
At BookBoon.com you can find the following illustrative ebook on how interest rates work in an international economy.
Interest Rates: An Introduction
Prof. Dr AP Faure Rhodes University
Please sign up and download here for free:
http://bookboon.com/en/interest-rates-an-introduction-ebook
and for short university courses you may enroll online for the course entilted: Yield Curve Analysis at the New York Institute of Finance which is a 4 week course which covers:
a) Overview of the Treasury Yield Curve and the role it plays as a benchmarking and forecasting tool
b) Role and structure of the Federal Reserve and the Federal Open Market Committee (FOMC)
c) Relationship between the Federal Reserve and the Repurchase Agreement
d) Introduction to the concept of duration and convexity and its impact on a portfolio
e) An understanding of active and passive trading strategies
For course details please read here:
https://www.edx.org/course/yield-curve-analysis-new-york-institute-finance-yca2015-1x
Thank you
Pieter Bergli - DeLoren Trust Holdings
A non-profit commitment to provide education on the properties of currency markets
Forex market commentaries and media reports for free
Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission
Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.
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