With its 4 trillion dollars traded each day, Forex is the largest financial market in the world. Many times, you will have heard or read that because it is such a vast market, Forex cannot be manipulated. No statement could be more wrong when examining the fundamental forces behind currencies.
If in the short-term it is speculation that moves the Forex market, in the medium to long-term it is the Central Banks—the largest manipulators of all—who predominantly influence exchange rates through economic fundamentals. They are certainly not moved by overbought or oversold indicators, or even the crossing of moving averages.
The reality of macroeconomic analysis demands a different approach. If you aim to trade professionally with currencies, you need to understand the underlying dynamics of Forex. You have to change the way you analyse a currency pair, because trading with currencies is very different from trading with a stock or commodity; you must view a currency pair not as a single price but as two opposing economies competing through their respective strengths and weaknesses.
For example, you cannot see EUR/USD as a unified price when analysing the market. You have to split the currency pair, examine the economies of both regions, and understand which one is stronger and growing faster than the other—this is the essence of fundamental analysis in forex.
And at the end of your evaluation, you must buy strength and sell weakness. This approach also helps you determine whether a currency pair is trading near its fair value, or if there’s a misalignment with macroeconomic reality—something that often creates opportunities invisible to purely technical traders.
By combining all these aspects with proper analysis of monetary policy, growth data, and cross-country divergence, you will discover a new way of looking at the Forex market and interpreting currency pairs. You will learn what really moves currencies beyond the surface-level indicators.
You will also learn to trade only when the odds of success are on your side, based on solid macro foundations, thereby limiting risks. And not only that—by grounding your trades in deeper economic logic, your entire trading activity will lose much of its emotional component.
So, what do you want to do? Do you want to finally learn to trade Forex like a real fund manager through mastering currency fundamentals, or do you want to continue using your own strategy—one that might be overlooking the forces that truly move the market?