Forex trading plays a vital role in international trade and business as products and services purchased in diverse countries must be paid for in the same currency. The rate at which you exchange one currency for another is available in the foreign exchange rates between different currency pairs. As a result, the foreign currency market is one of the most heavily traded globally, with a daily average turnover of more than $5 trillion.
Also, the FX market operates on a 24 hours schedule, from Sunday to Friday night, and can be influenced by the buy stop vs buy limit metrics. Individuals, firms, and organizations also regularly exchange a wide range of currencies to benefit from the rate swings and conduct international business.
News retail highlights market optimism as another key stock driver and one largely leveraged by traders in analyzing and projecting possible market trends. Global financial markets are rising to new highs amid increasing optimism that Covid-19 vaccinations and stimulus measures will help the economy recover quickly from the pandemic’s second wave. The MSCI World Index, which tracks companies throughout the developed world, hit a new high of 639.33. This has been the case since the beginning of November, when various vaccination discoveries were first disclosed; the index has risen 16 percent, giving traders more hope for stabilized markets.
Stocks in the Oil Industry are Falling, While Those in the Technology Industry are Rising.
Investors have been keenly watching the geopolitical tension between Russia and Ukraine with bated breath. This is because stocks in the oil industry are falling while those in the technology industry are rising. Crude oil prices plummeted roughly 27% in a week after reaching 14-year highs boosted by the Russia-Ukraine conflict.
The U.S. benchmark, West Texas Intermediate crude, concluded the day with a $96.44 per barrel on March 15, down 6.4 percent from the day before. Brent crude, the worldwide benchmark, finished the day at $99.91 a barrel, down 6.5 percent from the previous day. As a result, oil giants like Chevron Corp. CVX and Exxon Mobil Corp. XOM saw their stock prices plummet by 5.1 percent and 5.7 percent, respectively.
As a result, technology stocks have recovered thanks to chipmakers’ assistance. The benchmark 10-year U.S. Treasury Note rate jumped 2.1 basis points to 2.16 percent, a 52-week high. Higher risk-free market interest rates are often harmful to growth stocks such as technology. Despite this, NVIDIA Corp. (NVDA) and Advanced Micro Devices Inc. (AMD) saw their stock prices rise by 7.7% and 6.9%, respectively.
Importance of Technical Tools in Trade
Traders need to understand technology tools that they can leverage for success leading to the obvious questions; what are the technical tools for traders’ success? What should it be? In addition to the technical tools, traders need to examine the positive relations between investor sentiment and stock market performance. For instance, investors analyzed the Federal Reserve’s latest monetary policy decision, which signaled the start of a series of interest rate hikes this year. In line with their projections, the central bank increased rates by 25 basis points, validating the positive relationship between traders’ optimism and the market rates.
Take Profit and Stop Loss turns out to be one of the very important tools for traders who need to trade while focusing on other areas. It’s an optimal tool where you do not have the possibility of staying glued to their screens to appreciate the variations of the market. Trade Profit and Stop Loss have proved to be the tool for everyone, including newbies in the industry. This includes the new traders who don’t have the time to learn the forex nitty-gritty. The tool is also helping traders execute market orders with the best available market pricing. There are two common trips of orders that you at least need to understand as listed below:
Market Order- Refers to the order by a trader to purchase or sell security instantly. The basis of a market order is to ensure that the order is executed but doesn’t cover the precise execution price. Its execution is close to the current bid, which can also be informed by the buyer’s offer price for a sell order and buy orders, respectively.
Limit Order- Refers to a purchase or sale order for a specific price or better on security. A buying limit order is only filled if the price is below the limit, and a sell limit order is only filled if the price is above the limit. For instance, if an investor intends to buy shares of XYZ stock for no more than $20, then this amount could be specified in a limit order, which will only be executed if XYZ stock price is $20 or less.
In the highly polarized international markets, it can be extremely risky for any trader to ignore the power of optimism. You, therefore, need to carefully study the markets leveraging the available technical tools while also observing what’s happening on the international front.