Top 5 Factors That Affect Forex Trading

Investing in the foreign exchange market, or the Forex Market, can be tricky. There are a lot of factors involved in making a currency increase or decrease. Some of these factors can have a stronger effect than others, and some of them can affect one currency more than it will affect another. Here are the top five elements that should be included in your Forex Analysis.

International Trade

Countries trade with one another all the time. The amount of trade countries do with each other can affect their individual currencies. If a country exports more than it imports, the country is said to have a trade surplus. A trade surplus will increase the value of the currency. If a country imports more than it exports, it is said to have a trade deficit, which decreases the value of its currency.

Natural Disasters or Occurrences

An earthquake, tsunami, flood, hurricane, or any other natural disaster can have an instant impact upon the currency of a company. The people within the borders of the affected country are less likely to spend their own money or to make investments, either because they are unable to or because they need to use it to better their own circumstances. At the same time, the government of that country is less likely to spend money because they are focusing on getting the country back together.

Government Policies and Political Factors

When a government determines the annual budget, it tells where much of the money it has will be spent. It can influence different industries, and as a result, other countries’ currencies. The central bank of a country can also play a very important role by moving around and investing very large sums of money. It changes the value of the country’s currency with each decision it makes.

Other political factors might be a change in leadership. Certain people are seen around the world as more or less beneficial to the Forex Market. Many Forex brokers and Forex EAs pay close attention to national elections to have a better idea of what might happen economically in a certain country.

Economic Factors

When looking at Forex Trade Copier and Forex signals, know that much of what goes into the determination is economy of each country. The leading factor involved in the value of a country’s currency is their economic health. You need to study the GDP, debt ratio, purchasing power, employment numbers, and interest rates. All have an important impact.

Three Things To Look For In A Forex Broker

When looking for a Forex broker, you want to make sure you have the right one. It can be a dangerous and very unhappy place to be if you find out your broker is not everything you hoped he would be. When looking for a good broker, consider these 3 important topics:

Bigger is Better

It is true. The larger banks and brokers have higher trade volumes and more solid financial assets, so they have more access to better prices. They are able to offer smaller spreads and more options than the smaller brokers. Because it a relatively unregulated market the bigger banks and brokers are able to gain access to the better and higher quality executions. Rollover and Carry Trade.

Rollover is based on interest rates between the currencies. If you end up having to pay interest, it is called a “negative roll,” and this is routine. If you end up getting paid on interest, it is called a “positive roll,” and not offered by all brokers. Also, if you are interested in Carry Trade, you will want to know how your broker leverages your money. Be careful, because leverage can increase your losses by a large amount, but it can also magnify your gains, so think and research a lot before leveraging too much.
Customer Support

In a market that does not have a centralized exchange, and is not a very regulated market, it helps to have a broker that is willing to answer your questions and is available when you need them. The Forex market is open for 24 hours, 5 ½ days a week. You want to make sure your broker is also available during those hours. If you can trade, you should be able to reach your broker, and they should be kind, helpful, and informative.

If you plan to trade Forex online, you will also want to look into other aspect of the online broker. Look into using a Forex EA, or building your own. You want to know how to read your Forex Signal, and the online broker needs to have a platform that you like, and is easy to use. Forex Trade Copier is a great source that will help you through your trading experience. Either online, over the phone, or in person, it is important to have a Forex broker you can turn to for advice and help.

The Disadvantages of Trading Forex

Many people are interesting in trading on the Forex Exchange Market because it is easy to get into. While the traditional day trade companies require $25,000 to start out, the Forex Market can let people in with accounts as low as $1.00. This is one reason why so many people are flocking to the Forex sites. Before making the same decision, consider these three factors:


In the world of online investing, it is possible to leverage with an online Forex Broker by up to 400/1. Many people may find that to be a great advantage, as that could very easily bring in a lot of money if things go well, but the truth is, most people over leverage. The possibility for tremendous profit can also bring the possibility for tremendous loss. Be careful before leveraging too much when you make your investments. If it seems too good to be true, it probably is.


The Forex Market is very volatile. It can make big moves in an instant, bot upwards and downwards. Without proper Forex Analysis, or a good Forex EA, you might find yourself losing quite a lot of money really quickly. The volatility of this market can be what attracts some people, but it can be a real investment killer if it is not done right.

24 Hour Trading

While having the market available to you at all hours of the day or night can be convenient, understand that it can also work against you. You may hear your Forex Trade Copier App on your smart phone going off at 3:00 in the morning, giving you Forex signals that you should have paid attention to, but were instead lost in dreamland. Everyone needs to get sleep and rest, so the fact that the Forex Market goes continuously for 5 ½ days every single week can be a real disadvantage. Having a good Forex Broker might help, but without your own investment plan and ability to adjust to changes in the market, regardless when they occur, you could possibly lose a lot of money.

Trading Forex can be a good and lucrative trading option, but it needs to be well understood, and you need to understand everything about it. Get a practice account and shadow a successful trader to see if this is really the avenue you want to go when investing your own hard-earned money.