CurrenciesFX.com -

Market Analysis

MARKET ANALYSIS RULES

Market analysis refers to the process of studying market fundamental data and measuring the dynamics of future demand and supply in order to identify risks and spot trading opportunities.

■ Think Long-Term and Invest in the Future

Invest in the future, not in the present. Focus on the big things coming in the future and ignore the small things happening today. As Larry Hite suggests you may not know what will happen tomorrow, however, you can have a very good idea of what will happen over the long-run.

Your decision-making should be based on events that will take place in the next semester, not on events that take place today and are already discounted by the market.

Modern Monetary Theory (MMT)

Modern Monetary Theory or Modern Money Theory (MMT)

The Modern Monetary Theory is an alternative to the traditional macroeconomic theory. Generally, MMT suggests that there is no limit to the quantity of money that can be created by a central bank. The only limit comes from the impact of inflation.

In short, MMT suggests that countries and governments controlling reserve currencies can borrow and spend as much as they need to achieve employment, and later, create more currency to repay their debt.

MMT Economists are focused on fiscal policies

According to MMT, governments can create new money through their fiscal policy. The government’s fiscal policy is focused on budgeting and includes:

• Taxation
• Government spending, and
• Transfer payments