Page 92 - Ultimate Guide to Currency Trading

The Rothschild Group is a family bank that goes back to the beginning of the 1800s. It is
often considered one of the most influential and powerful banks of all time. The bank
made a habit of buying into the debt and currency; of countries that were going through
tough times, only to sell the debt later at huge profits.

Always Plan Carefully

There is quite a bit of economic news that can come out that is not related to the usual scheduled
economic numbers. The key is to be on the lookout for developing news and to plan for the worst
when you see it coming. At the same time, once the bad news passes over, there is a very good
chance that the currency will rebound. With this in mind, you should always ask yourself if you should
buy into the beaten down currency, only to sell out at a later date, and at a big profit!

Geopolitical News

Other factors that can affect the price of currency pairs include geopolitical news. This is the type of
news that has effects that go beyond money and currencies. It includes developing storm conditions,
hurricanes, earthquakes, floods, etc. It is the type of news that comes fast and sudden, and with
devastating results. Other factors include invasions, wars, hostage crises, etc. You will know when
these current events develop. It might be in your home country that the bad news is taking place, or it
might be in a country or part of the world that you care deeply about.

During these times, the world's currency markets can be in total, illogical upheaval, and the
conditions can last until the end of the crises. It is not recommended that you trade during these times,
as currency pair directions are very unpredictable at best, and there is the chance of the old valuation
models being thrown out completely.

If you have overnight trades and you wake up to very bad news, then most likely you have
either won big or lost big. If you have won big, take the time to close out your trades and walk away
from trading for a while. You got lucky. These things can't be predicted, and for every winner there is a
loser. Wait until the bad situation works its way out, and then re-evaluate the prices of the currencies.
They might be permanently changed.

Part of learning how to trade currencies is learning how to close out losing trades. If
you are tied up in a trade that has gone bad, you will have to decide if it is worth
waiting for the trade to turn around, or just taking your losses and walking away, to
Essential
trade another day.