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Before using the strategy, it is necessary to understand under what conditions the market works If you come to the market just to make money, you will lose them. To get something from the market, you need to be able to develop with it. When conditions change, strategies that previously worked no longer work. A typical example is trading robots. In history, they show incredible efficiency, however, in reality they are not that good, and their use often leads to deposit loss. Conditions have changed. The market is developing and you are not. Should you be surprised that money flows from your pocket to another? In the market, things change constantly, but it continues to obey economic laws.
To understand under what conditions you are Mexico Mobile Number List operating, you should try to answer a few questions: - What stage of the cycle is the economy in? - Does it slow down or accelerate? - What are the central banks going to do? The longer the economic cycle, the greater the chance it will end. At even the slightest signs of GDP slowdown, the central bank may reduce interest rates, which is a "bearish" factor for any currency. On the contrary, the acceleration of the economy is a reason to tighten monetary policy and strengthen its course. Why is fundamental analysis based on the principle of "a strong economy is a strong currency?" Because only a strong economy can afford high interest rates , like a magnet that attracts investors.
You are not going to put money in a bank below 5% if they offer 10% on the side? Looking at the dynamics of the GDP of the US and the euro zone, it is easy to understand why in 2017 the euro actively grew against the US dollar, and in 2018 the situation turned 180 degrees. GDP dynamics of the US and euro zone LiteFinance: Why trading robots don't work | Litefinance Fuente: Bloomberg. Two years ago, the growth rate of the European economy surpassed that of the United States, however, Donald Trump's large-scale fiscal stimulus and trade wars radically changed the situation: the US GDP accelerated, and its European counterpart, On the contrary, it began to lose strength. The dollar strengthened strongly against the euro due to divergences in the monetary policy of the Fed and ECB and higher rates on treasury bonds than their old world counterparts.
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