The Price of Money and Forex Indicators

Tuesday, August 17, 2010 GMT


By: Adrian Friggieri

Since money is not associated anymore with gold or other precious metals it has lost most of its value according to the latest Forex indicators. In the past if a government needed money they would require to have equivalent gold value or other precious metals that would back-up the money being printed.

So what is the difference now? If a Government requires money they would just print loads of paper notes and get these money notes into the economy for an economic boost. This would have not been possible at all at the time. Did you ever take note of how much is the actual money worth? What if your EUR 100 note in your wallet or your USD 100 note just the same would cost the government or your country 110% plus to get it in your hands. Amazed huh? Yes, money can cost more than its face value for the governments that circulate it and the difference in the price paid to the price as a face value of the note will go towards inflation. Yes inflation. This is how our economic climate gets worse in a moment, this is how your country can lose its monetary value and its population savings are seen shrinking within a moment.

Forex Trading and The Cost of Our Money Notes
But you can tell me at this point, what is the relationship between trading and the cost of our money notes? Well there is a direct relationship. Medium term to long term price movements of the currency pair. Although some currencies can be seen as in crisis and down under with no positive outlook soon to simply find out that this might be true according to some charts and Forex indicators, but only for the short term strategist this would make sense. The medium term to longer term strategist would know that when a price crashes it would still go up sooner or later as it cannot remain that low as it would harm the economic climate of the giants. Retracements and volatile price movements can affect the price to go negative heavily and even for a few weeks or possibly months but that is simply like a break, it will head back top track soon! This can be seen in all Forex indicators.

This article also relates to trends and support and resistance points when trading as it takes into consideration the same principle of price volatility but would come back to where it started sooner than you can think and without notice of course, that is the pipping time window in order to collect loads of pips and money from these moves. So watch out the economic Forex indicators people in your trading plan.