Basics

Comprehend How Banks Interfere on Forex


One way or another banks are the main players in financial markets. Their influence increases as they become bigger and internationally competitive.

Governments may sometimes help banks when they are close to bankruptcy, known as a “bailout” to help rescue them from failing.  This shows that banks are a crucial component of modern economics, including foreign exchange (forex).

Forex regulations

Forex is an Over-The-Counter (OTC) global market that is decentralized, which means there is no single central location.

As a result of the forex market being global, it is the largest in the world, and despite this, forex may be regulated in some jurisdictions, but is not regulated in many other countries.

Therefore, many forex market participants must self-regulate and demonstrate integrity in order for traders to trust them with their money when trading financial products.

Banks in forex

Investments such as forex which are traded from a margin account are not usually offered by traditional banks to the general public. Retail forex trading takes places through a forex broker.

Many public and private banks trade forex directly but usually just for their own accounts or institutional and large corporate clients. When banks trade with other banks, it is either done peer-to-peer or through interbank platforms.

Banks hold the accounts for forex brokers too, as well as for central banks. Because of the important role that banks have in the forex market, they control major assets which directly affect the rate of forex pairs. In other words, certain large banks can cause an impact in forex market prices, if they chose to do intervene.

Banks also use forex to hedge their positions in various currencies. Commercial banks may also have obscure products like dark pools (an anonymous space to trade stocks with less transparency than regulated national stock exchanges).

The largest potential impact comes from monetary policy and the result of central bank intervention, which can directly move forex prices, by adding or removing liquidity from the market (usually by selling or buying currency).

Another way monetary policy is implemented is through quantitative easing (such as printing more money to increase the supply) or by changing the interest rates which affect the cost of capital and credit markets. Consequently, such changes to a country’s monetary policy also affects the value of related forex pairs and the direction of forex market.

We discuss this topic further in an article about  how interest rates affect forex.

Education and information are the best way to be aware of what is happening in the forex market. Wiseinvest has a complete economic archive for you to get started!

Wise Signals are better than reading newspapers to know what is going to change the market mood.

The best way to trade forex

There are two ways to invest with our AI in forex:

1. Automated with AI-Trading. Check out the 3 steps to trade automated with our AI.

automated trading with ai bot

Don’t you have a broker account yet? Our AI is integrated to trade automated with the broker Oanda. Click here to open an account.

With Automated AI trading you do not need MT4 / MT5 and other trading platforms to invest in forex. All forex trades are automatically placed into your broker account and you can monitor the AI trading performance directly on our dashboard.

2. Manually with AI forex signals.

Wiseinvest also provides AI forex signals that perfectly fit into MT4, MT5 and any trading platform. To trade with our AI forex signals, you must simply copy the data you receive from each real-time signal into any forex brokerage account of your choice.

There are five unique variables for each AI signal, and each must be copied exactly, in order to match the performance of the signal as close as possible.

Each AI forex signal alert consists of the following five data points:

  • Symbol (forex pair)
  • Direction (long or short)
  • Position size (number of units or lots)
  • Take profit (price level to exit with maximum gain)
  • Stop loss (price level to exit with maximum loss)

You can trade forex with our free forex signals clicking here, or with our Premium subscription that provides you unlimited AI signals and automated AI trading in partner brokers. Whether you are a beginner or a Professional forex trader, our AI trading system can help you save time and improve your trading performance. Get started with free AI.

  1. Subscribe to a Wise-Plan.
  2. Open a Brokerage account. Check this article about the best forex Brokers.
  3. Set an amount and a position size on your Wiseinvest dashboard.
  4. Copy the signals that we will send to you via email and paste you’re your Brokerage account.

The forex signals are sent every time that our trading system powered by Artificial Intelligence (AI forex system) identifies a new trading opportunity.

When investing through Wiseinvest automated AI trading or AI forex signals, you do not need to calculate or change the leverage in your forex broker account. Learn more about leverage in forex trading clicking here.

Takeaways

  • Banks can exercise their strong position in the economy to influence the forex market.
  • Central banks act on behalf of governments to enact monetary policy, through changes to interest rates and the money supply, which affect forex market prices.

Our goal is for traders to not need to follow every bank news updates or central bank announcement, by focusing on the signals and not the noise. Wise Signals allows our members to receive real-time trading signals through our direct subscription model, powered by Artificial Intelligence (AI).

How banks interfere on forex: Did you like our content? Read more at Wiseinves.ai/education.

Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.

The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. The forex broker Fxcm warns that 69.66% of retail forex traders lose money trading CFDs.

The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.