Why is the purchase and sell of foreign currencies a profitable business and what factors influence on the quotations changes?. Today in the foreign currencies market there is a great volatility because of the raise of the crude price and the weakness of the dollar.
One of the person that has predicted what will happen with the crude price in 2008 was Ahmed Kaki Llaman, ex president of the OPEP (Organization od Crude Exporters Countries), who said that next year the barril price could be reduced until 75 dollars, according to Llaman this will depend on the evolution of the economy of the United States and the decision that takes the OPEP on its meeting of the 5th December in Abu Dhabi. It is important to remind that some days ago the proposal made by Venezuela was rejected and supported by Ecuador that has as an aim exchange the dollar per the euro for the crude purchase.
In front of this scenario the traders of the forex market try to do a more intuitive interpretation. A growing of the volatility in the long term is signal that the direction of the pair is strong, while a low of this, shows that the pair will float. The most experienced traders have shown that the most effective formula in the purchase and sale of foreign currencies is to continue with the direction of the pair rather than speculating about the trend as it can take some problems.
Every future decision will influence on the liquidity of the market, in the force in the future of some foreign currencies and the weakness of others, and above all, it will have a great incidence on the purchase and sale of foreign currencies. The foreign currencies market make us live with this constant changes and is our must to be able to carry them out on the best way to be able to take advantage of the situation.