The foremost thing any forex trader should know is that a foolproof method to predict the currency market does not exist. In the United Kingdom, even the Chancellor of Exchequer cannot tell whether the British Pound Sterling will be rising or falling, just as in the United States, the Chairman of the Reserve Bank cannot tell whether the US Dollar will be rising or falling. Therefore, the best strategy for a successful trader would be to combine the use of market observations and forex software to make smarter currency transactions.
Though forex software and robots may be useful, it is not advisable to rely on them solely. Events around the world can give a good indication of which direction to go. For example, the value of the Euro can dip upone the announcement that Italy is over 1.9 trillion Euros in debt. Conversely, the reveal that Prime Minister Silvio Berlusconi might step down could somewhat prove to stabilize the Euro.
These kinds of developments are important to forex dealers because it can give them an idea of which currencies to invest in and which ones to avoid. These are some examples of the impact global events have on the world currency market.
