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No Forex Trading Strategy Complete Without Thinking of the Brits

No Forex Trading Strategy Complete Without Thinking of the Brits

Anyone who has ever participated in forex trading or plans on trading the forex markets, needs to know about people who call the United Kingdom home. The Brits control the busiest trading session, the London period, and are a constant presence in the forex markets.

London is the trading capital of the world. The place is stuffed to the gills with savvy blokes who love nothing more than to grab a hundred pips and then head to the pub to drink several pints. As a longtime colonial power, England largely created the foreign exchange markets.

That influence has been, thus far, abiding. And in fact the influence of the U.K. on the forex markets appears to be growing as Britain has become a multi-cultural society.

British People Sound Smarter

Once you get used to hearing a British forex broker or trader tell you what's going on, American commentators start to sound parochial. Often, it's not just a matter of the pleasurable acoustics; many British traders are in fact smarter than their American counterparts.

British culture, for centuries now, has provided more "man of the world" and "international man of mystery" types, pound for pound, than any other country in the world. Being born and raised on a tiny, freezing cold island, the Brits have plenty of reason to travel.

These travels are excellent training for working a foreign exchange trading desk once you get back to London. Think about how such trips happen: you hit a foreign airport, everyone is speaking a different language, you need to change out your pounds for the local currency and you must make sure you don't get ripped off--

Enough of those experiences, you learn the psychology of money. Learn enough about the psychology of money, you make a hell of a forex trader.
Add to the British penchant for world travel the fact that Britain is now home to millions of immigrants who have experience navigating the global economy, and you are starting to see how the culture of the U.K. supports forex trading expertise (whether it is about forex robots or forex charts.)

Beware the London Open

The British cultural affinity for trading currencies--and anything else, come to think of it--is pronounced. But it is the British banks who really impact the forex markets in a way everyone can feel.

Forex traders who show up to trade the London open (3 a.m. New York time on Monday morning) will definitely feel the impact of the British banks, which frequently make heavy "squaring up" moves in this first hour of trading.

The moves by these major British banks to take profits or losses right off the bat can cause irregularities in the market. If you are not considerate of the behaviors of the British banks during these hours, your account balance may be the thinner for it.
At minimum, you must respect the sheer volume of the London open.

British Economy Dependent upon Traders

Going forward into the future of currency trading, it appears that the Brits will continue to play an outsized part in the forex markets. No offense intended, but trading and finance are a relied-upon revenue source for this country that does not have a lot of other natural resources.

Certainly the British government is in no position to restrain or disband the trading industry, as can be feared in the United States. The British government, were it to attempt to tie down the foreign exchange trading community, would rightly fear the economic consequences.

The British housing bubble may be even more severe than the American version. Property prices in London are outrageous. Unemployment in the U.K. is high. International finance is one of the last frontiers that Brits can rightfully claim to dominate.

Learning about the British role in the currency markets is a part of formulating a profitable forex strategy. Or at least it should be. If it's not, something is missing.

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