Mindblown: a blog about philosophy.
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What is Sentiment Analysis?
Sentiment analysis is used to gauge how other traders feel, whether it’s about the overall currency market or about a particular currency pair. Earlier, we said that price action should theoretically reflect all available market information. Unfortunately for us forex traders, it isn’t that simple. The forex markets do not simply reflect all of the information out there…
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What is Fundamental Analysis?
Whereas technical analysis involves poring over charts to identify patterns or trends, fundamental analysis involves poring over economic data reports and news headlines. (And even random tweets from a certain world leader before he was banned.) Fundamental analysis is a way of looking at the forex market by analyzing economic, social, and political forces that may affect currency…
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What is Technical Analysis?
Technical analysis is the framework in which traders study price movement. The theory is that a person can look at historical price movements and determine the current trading conditions and potential price movement. Someone who uses technical analysis is called a technical analyst. Traders who use technical analysis are known as technical traders. The main evidence for using…
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3 Types of Forex Market Analysis
By now you’ve learned some history about the forex, how it works, what affects the prices, blah blah blah. ZZZZZZZZZZZZZ. ? This is all obviously super important, but know that you’re now thinking… BORING! SHOW ME HOW TO MAKE MONEY ALREADY!!!! Well, say no more friends because here is where your journey as a forex trader…
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What is the Forex Broker’s Order Execution Quality?
What is the quality of your broker’s order execution? Order execution is a process of filling the requested buy or sell order of the trader. In the previous lesson, we talked about the prices that forex brokers show you on their trading platforms and whether the prices are fair and accurate. But having fair and accurate pricing…
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Where Does the Forex Broker’s Price Come From?
When trading forex, you are speculating on the future direction of currencies, taking either a long (“buy”) or short (“sell”) position depending on whether you think a currency pair’s exchange rate will go up or down. Specifically, you seek to profit from fluctuations in the exchange rates between currencies, betting on whether one currency’s value, like the Japanese yen, will go…
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Know Your Forex Broker’s Hedging Policy
For every forex broker, each and every trade entered into by its customers represents exposure to market risk. Market risk is the risk of a loss in a position caused by adverse price movements. Because the forex broker is always the counterparty to your trades, it may decide to execute your trades internally or hedge your trades externally. The term “hedging”…
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C-Book: How Forex Brokers Manage Their Risk
Aside from forex brokers who “A-Book” or “B-Book“, you might also come across the term “C-Book”. “C-Book” is a term that’s used to describe “risk management strategies” that forex brokers and CFD providers use that are supposedly different from A-Book or B-Book. In our opinion, “C-Book” is just marketing jargon. It’s not really a different…
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The “Hybrid Model” Used By Forex Brokers
In the previous lesson, we talked about why forex brokers are attracted to B-Book execution more than A-Book execution, even though it’s riskier because the broker can blow up if it doesn’t know WTH it’s doing has poor risk management. But what if brokers could get the best of both worlds? So far, we’ve learned that when a…
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Why Do Forex Brokers B-Book?
What is a B-Book broker? When you open a trade with a B-Book forex broker, the broker takes the other side of your trade and does not hedge. The broker keeps the trade “in-house”. Remember, if your broker is taking the other side of your order and not hedging it with a liquidity provider (LP), it…
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