When does gambling pay off?
Referring to previous publications on the #Exchord blog – our entrepreneur thought: “What idea doesn’t go and it gets more and more complicated. I promise myself – a moment to breathe, I will observe a little …”. Here is a further report.investing.com portal rich in various charts, analysts’ texts and all in real time. It is a huge treasure trove of data. One can be tempted to look for connections and rules. Getting to know why currency rates fluctuate and when can be key to making currency exchange decisions. “I focused on currency pairs that are relevant to me: USDPLN and EURUSD.”
Here are the conclusions he developed from his observations:
1.There are several baskets of currencies: from the Safe haven basket, which includes min. There are several currency baskets: from the safe haven basket, which includes the USD, EUR and Japanese yen, i.e. the currencies of the world’s most stable economies, to the emerging markets basket, which includes the PLN, HUF, LIR, REA and other currencies of developing countries.
The principle is as follows: if the world is stable (politics, economy, etc.), then the currencies from emerging markets gain strength, which is often called the increase in “appetite” for risk. This causes a situation in which importers from emerging markets, such as Poland or Brazil, can buy goods or services cheaper, for which they pay in USD or EUR. If there is any unrest in the world, capital from emerging markets is moved to safer markets, which causes currencies in emerging market countries to weaken, which in turn is good for exporters in those countries.
2.You can observe the decisions of central banks in the countries and macroeconomic indicators specific to the economies that affect the exchange rates that are linked to that economy. For example: the unemployment rate in the United States affects currency pairs linked to the dollar.
The principle is as follows: if the reading of a given indicator, e.g. data from the American market or predictions concerning decisions of central banks are confirmed, then nothing special may happen to the currency pair USD – another currency, but if the reading of the indicator, e.g. for a given half-year, year or quarter differs significantly from the forecast, then one may observe a strong hesitation in the exchange rates of currencies linked to a given economy.
And our entrepreneur? He paid 5000 PLN to the account and started to play – his head at that time “flew” between the charts and the calendar and what specialists wrote. In this way, our trader opened a second business – speculative, leaving in a sense his primary business. Of course, he lost everything. Besides the money, he invested a lot of time and nerves like a typical gambler.
At the end of his love affair with gambling he concluded: “What are you doing this for? Focus, calculate for yourself exactly how much currency you need, for when, when the risk arises, and get this area of your business in order.
DON’T GAME, DON’T WASTE TIME FOR ADDITIONAL RISK”.
Don’t take risks, take advantage of expert experience:
– sign up for the free exchange rate risk management app
– schedule an individual meeting and manage your currencies without losses