What causes a recession?

June 30, 2024 No Comments

A: The National Bureau of Economic Research (NBER) defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production and wholesale-retail sales.” A recession

What do the terms weak dollar and strong dollar mean?

June 30, 2024 No Comments

A: The terms weak dollar and strong dollar are generalizations used in the foreign exchange market to describe the relative value and strength of the U.S. dollar against other currencies. The terms “strong,” “weak,” “strengthening” and “weakening” are interchangeable for any currency. Defining a Strong and Weak

What does deflation mean to investors?

June 30, 2024 No Comments

A: The cause and effect of deflation are complex economic forces, which requires a short introduction to the concept and an explanation of how it affects investors. Deflation is a macroeconomic condition where a country experiences lowering prices. This is the opposite of inflation, which

What does rollover mean in the context of the forex market?

June 30, 2024 No Comments

A: In the forex (FX) market, rollover is the process of extending the settlement date of an open position. In most currency trades, a trader is required to take delivery of the currency two days after the transaction date. However, by rolling over the position

What economic indicators are most used when forecasting an exchange rate?

June 30, 2024 No Comments

A: The economic indicators used to forecast an exchange rate are the same ones used to determine the overall economic health of a country. The gross domestic product (GDP), consumer price index (CPI), producer price index (PPI), employment data and interest rates are all key

What happens to the US dollar during a trade deficit?

June 30, 2024 No Comments

A: During a trade deficit, the U.S. dollar generally weakens. Of course, there are numerous inputs that determine currency movements in addition to balance of payments, including economic growth, interest rates, inflation and government policies. A trade deficit is a negative headwind for the U.S.

What impact does a higher non-farm payroll have on the forex market?

June 30, 2024 No Comments

A: Traders are constantly monitoring various economic indicators to identify trends in economic growth. Some of the most watched economic indicators include the Consumer Price Index, housing starts, gross domestic product and the employment report, which contains a variety of data and statistics regarding the

How do I use Relative Vigor Index (RVI) to create a forex trading strategy?

June 30, 2024 No Comments

A: A forex trading strategy designed to make maximum profits from a long-term uptrend can be created using the Relative Vigor Index, or RVI, in conjunction with other technical indicators. The RVI compares closing price to price range and provides a reading of the strength

In the forex market, how is the closing price of a currency pair determined?

June 30, 2024 No Comments

A: The foreign exchange market, or forex, is the market in which the currencies of the world are traded by governments, banks, institutional investors and speculators. The forex is the largest market in the world and is considered a 24-hour market because currencies are traded

How do I use Stochastic Oscillator to create a forex trading strategy?

June 30, 2024 No Comments

A: The stochastic oscillator is a momentum indicator that is widely used in forex trading to pinpoint potential trend reversals. This indicator measures momentum by comparing closing price to the trading range over a given period. The charted stochastic oscillator actually consists of two lines:

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