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  1. #1
    Junior Member

    Do We Devalue Currencies When We Trade? !!!

    Do We Devalue Currencies When We Trade?

  2. #2
    Specialist Member marvel's Avatar
    We don’t devaluate currencies because the market is too big (several trillions of trades each day) and we are too small. Also the devaluation is a process of ‘real money’ flows, which includes investments and central banks. That mean it is produced by the long term trades, the short term trades, which are most of the small speculators have only short term effect, as they close their trades during the week.

  3. #3
    Veteran Member uj.forex's Avatar
    lol... we are not their Reserve Banks and we dont devise their monetary policies... it's the reserve banks that do... and on the basis of their decisions, the value of the currency is increased or decreased.... we are small traders, our trades dont even impact the market as such... its the banks and huge institutions that trade in millions and billions of lots, and shape the market movement...

  4. #4
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    Maybe his "we" means all traders. If this is what he meant to say then yes. More sellers mean devaluation. Demand and supply is key factor in deriving value of a currency (other than economic factors).
    But if "we" is used for bots community then above two posts r correct. We r like a drop in ocean having negligible affect.

  5. #5
    Junior Member
    Quote Originally Posted by M.J View Post
    Maybe his "we" means all traders. If this is what he meant to say then yes. More sellers mean devaluation. Demand and supply is key factor in deriving value of a currency (other than economic factors).
    But if "we" is used for bots community then above two posts r correct. We r like a drop in ocean having negligible affect.
    We meant every trader all together, though i wasn't thinking about the banks. The banks are probably what Ron Paul was talking about February 8, then the federal reserve just printing money.

  6. #6
    Specialist Member RCox's Avatar
    Its a good question. Ron Paul makes very different points, these are not directly related to trading the financial markets in the way you mean. Paul is talking about quantitative easing, which essentially is printing money out of thin air, and this does reduce the value of a currency. When we trade, you only devalue a currency when you sell it. You actually enhance the value of a currency when you buy it. But, as the others said here, each person plays a very small part in this because the currency market is the largest and most liquid in the world. Sort of like an ant moving around sand in the Sahara.

  7. #7
    Junior Member
    Quote Originally Posted by RCox View Post
    Sort of like an ant moving around sand in the Sahara.
    That's a good one there.

  8. #8
    Specialist Member marvel's Avatar
    Most of our trades compensate each other. Very close to 50% of small traders are bullish in a given moment of time and 50% are bearish, that’s why the final effect on the market is not visible. Only big amounts of directional selling or buying could move some pair. For example 500 mln $ trade could move a currency with almost 100 pips in not so liquid hours I read in a paper.

  9. #9
    Junior Member
    Quote Originally Posted by marvel View Post
    Most of our trades compensate each other. Very close to 50% of small traders are bullish in a given moment of time and 50% are bearish, that’s why the final effect on the market is not visible. Only big amounts of directional selling or buying could move some pair. For example 500 mln $ trade could move a currency with almost 100 pips in not so liquid hours I read in a paper.
    Either way USA is a weak economy, not because they can't fix it, but because of arrogance.

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