Page 19 - Ultimate Guide to Currency Trading

current and future economic conditions of these countries that neighbor the euro bloc. This observing
can be best done by reading and studying brokers' reports, and the commentary and guidance put
forth by the English versions of the Swedish central bank (www.riksbank.com), Norway's central bank
(www.norges-bank.no/en), and the Swiss National Bank (www.snb.ch). By contrast, you as an FX
trader can look for conflicting economic, interest rate, balance sheet, and economically political
significant information on the European Central Bank website
(www.ecb.int/home/html/index.en.html).

With a bit of patience and insight, an FX trader such as yourself can train to spot the
exceptional setups and trading opportunities that trading euro-proxy crosses offers. While it is true
that the economies of Sweden and the like are small, it is that very fact that makes the krona, krone,
and franc such market darlings in the post 2008-2009 banking crisis world.

In 2008-2009 the world's economies suffered from a near failure of the banking
systems. Recovery came at the cost of an increase in the quantity of money supply by
the world's central banks. The increase in monetary base was historic, and by some
estimates, it increased in the United States by four times the amount before the crisis

began!

These independently monitored and managed economies and currencies are free of some of
the problems of the big four: the USD, EUR, JPY, and GBP. These big four economies and currencies
have suffered the most from the most recent worldwide-banking crisis, while some minor countries
(and therefore their home currencies) have economically recovered at a faster and more widespread
rate then the big four. This is a newer development in the FX trading environment, and if studied,
understood, and acted upon, can offer you very profitable trades with a relatively high percentage of
trading successes. Other crosses include all of the big four, USD, EUR, JPY, and GBP traded against the
commodity currencies such as the New Zealand dollar (NZD), AUD, and CAD. Of course it is possible to
study, monitor, and predict the movement of FX pairs that are crossed with the euro-proxy minors
and other minors. Such a trade might include CAD/NOK, with per-haps the idea of trading the
difference in the price of crude oil in the two economies (as North American-produced oil can and is
often priced differently than the oil of the North Sea). Perhaps you could also exploit the fact that the
NOK trades a high amount of its oil with EUR nations, (there-fore increasing its balance sheet position
in EUR) and the fact that the CAD's main trading partner is the United States of America (increasing
CAD's balance sheet position in USD resulting from Canada's net export of oil to the United States).

Overlapping Times of Money Center Trading

The currency market is one that is open twenty-four hours, from Sunday afternoon New York time to
Friday afternoon New York time. These trading times reflect the changing time zones of the major
world money centers that trade currency. Whether it is Tokyo, Sydney, Zurich, London, New York, or
Chicago, throughout the trading week there is always a major trading house, bank, or hedge fund that