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Utilizing Forex Info? Diversification-Business Opportunities?

  • #1
  • First Post: Mar 1, 2018 2:15am Mar 1, 2018 2:15am
Hello,

Notwithstanding the Challenges of Trading, how does one utilize the knowledge of FX to diversify into other business opportunities.

Example: One can look at monthly charts, which fairly give us an idea of trend of a currencies. This translates into weakness and strength of countries economies.

Mapping this info to a countries means of production like Australia-Mining and New Zealand-Dairy, can one take advantage of any bottlenecks in the Supply Chain or Production Chain. Perhaps venturing into Imports and Exports business or start a factory/unit of production knowing that a shortfall in some product is coming soon etc....

Simply put, how can one turn the Knowledge of FX into Traditional Business Opportunities?

[Excluding Trading and Trading Related opportunities like Coding, Signal Services, Account Management etc...]

Thanks
  • #2
  • Mar 3, 2018 5:02am Mar 3, 2018 5:02am
Quoting aaven
Hello, Notwithstanding the Challenges of Trading, how does one utilize the knowledge of FX to diversify into other business opportunities. Example: One can look at monthly charts, which fairly give us an idea of trend of a currencies. This translates into weakness and strength of countries economies. Mapping this info to a countries means of production like Australia-Mining and New Zealand-Dairy, can one take advantage of any bottlenecks in the Supply Chain or Production Chain. Perhaps venturing into Imports and Exports business or start a factory/unit...
Hi aaven,
That is a really interesting question you pose. My attempt to answer it takes me all the way back to my college days studying economics. In basic macro economic theory, the exchange rate between two currencies reflects the sum total of many influences, such as the balance of capital and trade flows, the interest rate differential, relative political and social stability, and the market's perceived estimates of future relative economic growth and inflation of the two economies. In short, it's a complicated picture! Because of this complexity it is difficult to have very precise useful insights about one specific business opportunity based just on the exchange rate.

What you can say is that, once you come to a view on exchange rates, you can then predict the effect on businesses, some more confidently than others. For example, if the home currency is thought to be depreciating then domestic exporters are likely to have more favourable operating conditions than domestic importers, because of the exchange rate effect on the price of goods. The problem, of course, is that your view doesn't have to be right!

And there is also the matter of time frame. You may be right about the overall direction of the currency in the long term but there can be all sorts of shorter term trends because you never know which of the various drivers of exchange rates is going to be the focus of attention at any time, and each driver doesn't have to point the same way. As JM Keynes (as we are on economics) famously said, 'the long run is a misleading guide to current affairs. In the long run we are all dead!'

Hope that might help
  • #3
  • Mar 3, 2018 7:28am Mar 3, 2018 7:28am
Quoting aaven
Simply put, how can one turn the Knowledge of FX into Traditional Business Opportunities?
If you have such ''knowledge'' or can predict the price, you can make money directly in Forex.
For example, is EUR/USD is going up, down or sideways in the next weeks or months?
Don't give up on your dreams. Keep sleeping.
  • #4
  • Mar 3, 2018 7:32am Mar 3, 2018 7:32am
Quoting aaven
Hello, Notwithstanding the Challenges of Trading, how does one utilize the knowledge of FX to diversify into other business opportunities. Example: One can look at monthly charts, which fairly give us an idea of trend of a currencies. This translates into weakness and strength of countries economies. Mapping this info to a countries means of production like Australia-Mining and New Zealand-Dairy, can one take advantage of any bottlenecks in the Supply Chain or Production Chain. Perhaps venturing into Imports and Exports business or start a factory/unit...
if u r a good chart analyzer then u can use it to d favor of companies related w commodities in terms of commodity prices, stockpiling or reducing stocks etc...

eg.. iron ore prices pretty related to d satellite pictures of producers stockpiles pictures or wheat...
WaBaS Where are Buyers and Sellers
  • #5
  • Mar 3, 2018 3:55pm Mar 3, 2018 3:55pm
Quoting marcmarc
{quote} Hi aaven, That is a really interesting question you pose. My attempt to answer it takes me all the way back to my college days studying economics. In basic macro economic theory, the exchange rate between two currencies reflects the sum total of many influences, such as the balance of capital and trade flows, the interest rate differential, relative political and social stability, and the market's perceived estimates of future relative economic growth and inflation of the two economies. In short, it's a complicated picture! Because of this...
Thanks Marc for taking the time in sharing your insights....
  • #6
  • Mar 3, 2018 3:56pm Mar 3, 2018 3:56pm
Quoting mr.brown
{quote} if u r a good chart analyzer then u can use it to d favor of companies related w commodities in terms of commodity prices, stockpiling or reducing stocks etc... eg.. iron ore prices pretty related to d satellite pictures of producers stockpiles pictures or wheat...
Thanks Mr.Brown...
  • #7
  • Last Post: Mar 3, 2018 4:00pm Mar 3, 2018 4:00pm
Quoting Artcool
{quote} If you have such ''knowledge'' or can predict the price, you can make money directly in Forex. For example, is EUR/USD is going up, down or sideways in the next weeks or months?
Artcool,

Prediction might have been a wrong word, what i meant was going with the general sentiment of a currency over a little higher time frame...
Appreciate for your post...

Thanks
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