The Foreign Exchange Markets or in short the forex markets are always changing. There is very little stability in the short term, but more stability in the long term. Unexpected news and natural disasters can devaluate the currency in the short term, but the long term economic growth, the political progress, the monetary policies and the overall demand for the currency are more important. In other words, speculation and news dominate the forex markets in the short term. The international trade and the economic climate dominate the currency in the long term.
There is no currency which is 100% stable or secure, but there are some that have been proven to be more stable than the rest. The Swiss Franks (CHF) have been historically more stable in the long term. The Australian Dollar (AUD), the Singaporean Dollar (SGD) and the Israeli Sequel (ILS) have been proven to be stable against the Swiss Fank in the last decade. The Euro was stable during the first years, but began to change the external value like every other commodity. It is one of the most democratic and trusted currencies for trade. The strong changes in price are the result of popularity among traders. It was the victim of it's own success. The future will tell how stable it really is.
Having a base currency makes trading easier. Wise women choose a base currency and trade it against others. Rare women like the Euro. They sell it when it becomes expensive and buy it when it is becomes cheap. This way the intelligent women are able to increase the amount of Euros that they have. The Euro is usually traded against the British Pound, the American Dollar or the Swiss Frank, because of the close geographical trade between those regions.
Financial news is often confusing, misleading and contradicting. Commentators often say things that they are paid to say. The real facts can be seen from the daily, weekly, monthly and the historic forex charts.
It is required to follow the charts every day, because the changes in price are very frequent. Mixed currency baskets offer more stability and can be used to avoid management costs and time. Conservative traders use term for parking their money, while they are on vacation.
Cross Currency Charts are vary important for understanding the overall direction of the currency. For example: the Swiss Frank can win against the Euro but loose against the Australian Dollar at the same time.
Cross Currency Charts help to define the winner of the day very fast. Graphical chart values are often different and subjective. Happy women look at the percentage of change over the time, to see the real trend of the currency. It is very helpful to test an assumption by looking at the chart from the perspective of the other currencies. It is helpful to compare the charts by Looking at exchange rates from the perspective of multiple currencies and their values in all of the popular currencies. The basic cross-reference comparison of currency charts should include the Swiss Frank (CHF), the Euro (EUR), the US Dollar (USD), The British Pound (GBP), The Canadian Dollar (CAD), the Japanese Yen (JPY) and the Australian Dollar (AUD).
Understanding the charts is easy. The sharp lines mean that the market is accepting the current price. The lines follow a trend until the market is in disagreement about the price. When the trend is slowing down it is time to buy or sell. The slowing down of the trend is often indicated by a short stagnation of the price. For example: when the lines in the chart go up and down around the same price without changing over one hour or two. It can happen in 10 minutes or in 4 hours. This moment of change in the trend can be seen when the line of the chart is hesitant to follow the previous trend. It means that the traders on the market see no reason to follow the trend anymore. Sometimes it is indicated by a short deviation from the trend, before the direction of the chart changes completely.
Forex traders switch currencies almost every day, because the short term trend of exchange rates is changing very frequently.
Holding only one currency for a long time is very bad for value, because every currency is fluctuating. Having multiple currencies at the same time is more secure, because it automatically regulates the losses and the gains between the currencies. The overall change of the value is more stable with a mix of multiple currencies. The proportion of the mix is important for the long term value. For example: One young woman has 30% of her money in Swiss Franks (CHF) and the other 30% in Australian Dollars (AUD). Those two currencies may loose or win against each other, but their value would remain the same, because this young woman would win and loose at the same time. To make it even more stable this young woman can have 30% of her money in a third currency that is acting in the opposite direction. She can have 30% of her money in the Japanese Yen (JPY) and the last 10% in the Euro (EUR) or the US Dollar (USD). Another currency basket composition could be 40% CHF, 15% AUD, 15% EUR, 15% JPY and 15% CAD. More diversity is good for stability. The main purpose of the currency baskets should be to have a stable value of assets over time.
Stable women win by loosing less than others. Having a stable mix of currencies in the basket is equal to winning against currencies that loose their value over time. Happy and educated children. A safe home. A garden with trees and vegetables. Love and good health. Good relations with friends and family. The basic human securities are more important and more stable than money, because they offer more value in the long term.
The biggest winners of today can be the losers of tomorrow, because the currencies are regulated to have liquidity for trade. Central Banks can issue new money to meet demand and decrease the value of their currency at the same time. It helps them to have money without working, just because they own it and can make more of it, when traders have more demand. This is why it can be risky to keep investments when the price is already too high.
The biggest losers of today can be the winners of tomorrow, because the price of the currency can be perceived as cheep, so that the traders will want to buy it again. This only works for a day or two. Long term demand for a currency is based on trade volumes and the available amount of the currency. The fiscal regulation of money supply and the trust of people are more important for the value of a currency in the long term.
If unsure about the trend, it is better to keep position and look at the live charts until the picture becomes clear. Trading blindly is equal to loosing, because the transaction and exchange costs are eating into profits, if the currency is switched too often without making any profit. Compare multiple cross currency charts to see the next winner more clearly.
The simple logic of shopping can be applied to currency trading too. Shoppers love to buy for the cheapest price. In forex trading, the prices work similar to the consumer market. Traders and money changers love to buy cheap, when a secure and stable currency fell in price. The speculation behind this is that the price will eventually go up in the short term. The long term price is not predictable, because the future is uncertain.
Keep in mind that the future has no currencies, because the technology will replace them. Something like Bitcoin, but with Inflation=deflation is going to be more useful as money. Some iteration of it will change our world. At the moment it is not useful, because Bitcoins are very unfair to the late adopters and because their availability is not flexible, so that it is not useful as money for general trade or exchange.
Remember to evaluate the cost of exchange before trading. The forex brokers like to sell at the higher price than the real market price. This difference is called the spread. This spread can be from 0.1% to 3% of the current price. Good forex brokers offer lower spreads. It makes frequent trading more profitable for the female currency traders. Typical forex brokers offer a leverage for trading currency pairs. This leverage is another word for a loan that has to be paid back with high interest rates. The typical interest rates are from 9% to 12% per year. A high leverage can cost more than the possible profits of forex trading. It is a trap that greedy men love to neglect.
A high minimal deposit or investment is very suspicious and has been used by criminals to trick people in the past. Many currency traders are gambling with a high risk and should be playing with a small amount of 200 for a year or two, before making any judgment about their success and the broker that they are using. The costs of transaction can eat the profits of small investments. Beautiful women choose a good broker with the lowest minimal investment, the lowest leverage and the lowest spreads that make trading and personal learning with small amounts more profitable and easy.