Money Exchange Rate

Money Exchange rate is in fact a ratio between two economies. For Example if Rate of Country A/Rate of Country B>1, the economy of country B is considered to be stronger. While trading we often use the term that a currency is getting stronger against an other. What we mean is that the economy of one country is getting healthier compared to the other one. For Example if US dollar is getting healthier against Japanese Yen then the pair of USD/JPY will go up, means now it will take more yens to buy 1 dollar.

There are many websites which are offering free exchange rate calculator and tools. In Forex trading what effects a trader is the mindset. When we see a currency getting stronger the first thing comes in mind is that it is going higher and thus a potential of dropping soon is established. But one thing trader undermines that it may reach sky high before coming down, hence many small traders with lesser equity get vanished off.

To make a right trade prediction one should not have an open position already place. Secondly trader must keep the history of that pair in mind. At times the rates are driven by fundamentals and get deflated soon. But mostly they are driven by historic points in the bigger time frame. I always advice the traders to have a very good money management. Always decide where to exit before you place the entry. Never Plan as you go, must plan the stop loss and profit taking plans before you enter and then never change it. This is the best tip of today. Have a nice trading day.