Global markets and their relation to Forex- Free Training Course in Forex – Lesson 22

We think you're beginning to feel now with the importance of the profession and that Forex market does not move randomly but the changes in the country's economy is the main engine that needs you some diligence to study if you want to win, but make sure it is doing there will be no difficulty in trading in foreign currencies, and in this lesson we'll look at the financial markets and commodity markets to know what is the relationship between them and the Forex market.

Knowledge of some of the principles for financial markets is considered more important than ignorance because they benefit the trader who relies on the analysis of the news in his analysis of the foreign currency and cannot do without it, we simply we will provide you with quick information to discover future trends for the movement of currencies.

I. the relationship of Forex with stocks indexes (stock exchanges)

The stock market is the market is handled in which securities instruments, stocks and bonds issued by companies, banks or governments or other institutions, public bodies and be negotiable, and here you have to know the result of the average closing stock index stock Securities Stock indexes of the country Her currency want to trade in currency, in order to be able to determine the extent of the growth or deterioration in the economy of this state and you want to buy or sell their currency.

Study changes in the size of the stock indices of global exchanges and the stocks indexes; you must know the changes in stock indices for global stock markets for securities of any Stock indexes must know the result of the average index of the stock exchange of the currency country you want to trade in its currency.

For example, when an increase in the Dow Jones stock exchange USA's 0.3% per day happened, this means that 30 shares of the leading companies in the United States, which represents the index of the Dow Jones, its prices increased in for 0.3% that day this means earnings growth in the U.S. stock market.

One of the main indicators that their news affects the stock market on the Forex market:

Indicator name	Indicator details	currency
NIKKEI 225	Contains 225 shares representing approximately 70% of the capitalization of the Tokyo Stock Exchange.	JPY
HANGSENG	Hong Kong Stock Exchange Index	JPY
DAX	Contains 30 securities representing 70% of the capitalization of the Frankfurt Stock Exchange	EUR
FTSE100	And contains 100 securities representing 70% of the London Stock Exchange (the euro zone EURO area)	GBP
CAC40	Consists of 40 sheets of financial companies the most important in the Paris Stock Exchange.	EUR
NASDAQ	New York Stock Exchange Index	USD
DOWJONES	This index contains thirty securities representing 30% of the New York Stock Exchange.	USD
S&P500	Contains five hundred shares representing 80% of the market value of the shares traded on the New York Stock Exchange.	USD

II. The relationship Forex energy markets (crude oil market)

Trading on Crude Oil

Of what does crude oil consists of?

Oil is forms by remnants of animals and plants that lived millions of years ago in the sea (water) before the dinosaurs, over the years, and is still covered by layers of mud, and by heat and pressure transformed these layers to what we call today from crude oil, and the word "oil " is derived from the Latin meaning" oil is extracted from the rock "or" oil in the ground”

Where is oil extracted from?

Crude oil is monitored and traded as a commodity, which is a yellow color tends to blackness and the so-called "black gold" because it is the lifeblood of industrial, usually found in areas which are called underground tanks, scientists and engineers since to discover a new area by studying samples of rocks, they take measurements and study site begins digging, planting a structure which is called, the structure of 'Derek' 'is built to accommodate pipes and tools to lift the oil from the well-etched into the surface.

Largest producer of crude oil

     Canada

     Saudi Arabia

     Russia

     USA

     Iran

     China

More than a quarter of crude oil production in the United States and the largest in the United States production is the following:

     Texas

     Alaska

     California

     Louisiana

     Oklahoma

The amount of crude oil produced (locally) in the United States, has begun to shrink in the years after the other, however, the use of products made from crude oil is increasing, which makes it necessary to America to buy oil from other countries, where about 58% of the crude oil and petroleum products used in the United States comes from other countries.

OPEC

The Organization of Petroleum Exporting Countries

It Is an organization of Petroleum Exporting Countries members which are 11 countries and sold in barrels of oil and the higher the price per barrel, the less the price of the dollar.

Canada's largest producers of crude oil (CAD), And America's largest oil-importing countries (USD)

There are many countries that produce this black gold and store many of the large reserves of it in order to face the days of high oil prices, including Canada, which the West often call it as the black gold Mafia.

Canada is one of the largest oil producing country in addition to that it stores a lot of it, followed by Saudi Arabia in second place, which is one of the largest exporters of oil, and we see that the United States is the largest country in the world oil consumer for this we see that the U.S. economy, including the U.S. stock and the U.S. dollar affected by fluctuations in world oil prices and news of the EIA.

Please remember that this is an important point...

If oil prices rose

That was good for the Canadian dollar, the Bad and the U.S. dollar

If oil prices fell

That was the bad on the Canadian dollar, and good for the U.S. dollar

So what do we take advantage of that?

Yes we trade in USD / CAD to monitor oil prices …

As you can see on the chart that the movements of the U.S. dollar / Canadian dollar versus each other.

For example, if the price of oil rose the price of the U.S. dollar fell and the price of the Canadian dollar raises and vice versa.

Please Post this important tool to the toolbox when you analyze your trading dollar / Canadian, this performance is more important for the long-term strategy.

III. The relationship Forex market gold 

Trading XAU

Gold trading is "busy" and it is gold sold by ounce or kilo ounce and 24-gauge (denoted by OZ) is a unit of measurement of mass and is used to measure ounce weights precious metals such as gold and silver.

So how do we connect the gold trade Forex?

Excellent question... And so we answer, you should know that the gold in the world economy is seen as the protector of the country from the vagaries of inflation and is one of the most important commodities that are traded, and many traders believe that trading in the Australian dollar, such as trading in gold.

Australia's largest gold producer I and America's largest importing countries have USD

Because Australia is one of the world's largest gold producer and exports about 50% of it as a commodity as well as precious metals, and this item is considered one of the most important accounts of the GDP of Australia, so many traders watching rise and fall of this item because they affect the Australian dollar.

Please remember that this is an important point...

If gold prices rose

That was good for the Australian dollar, and the worst on the U.S. dollar

If the prices of gold

That was the worst on the Australian dollar, and good for the U.S. dollar

So we can take advantage of that?

Yes we trade in the AUD / USD to monitor gold prices

Let's take a look at the scheme of gold compared to the Australian dollar

This is scheme of the month and compares the movement of gold and currency pair AUD / USD

Often we see that the pair with the direction of gold, but the one before the other...!!

Red dots indicate the places change the direction of gold seems to be moving before the pair gold

The relationship between them is important now.

Traders are trying to watch gold prices do their analyses on the Australian dollar against the U.S. dollar, so we say to those who do not know how to analyze the pair in the currency market, it can be traded if you knew determine the direction of gold in the stock market in the future.

Very important note: The gold and the Swiss franc are safe haven for investors in the case of wars and political events and disasters, as in the Convention on the "Bretton Woods" which requires linking the exchange rate of the dollar in gold, so as to ensure the stability of exchange rates of major currencies globally, and despite the end of the agreement gold is still big role in front of the world's currencies, as has the Swiss franc over the history as an asset safe because of strict confidentiality of its banking system, and the political neutrality of all countries, and the independence of the central bank, and the huge reserves of gold.