Jordan Lindsey: Understanding the Force Behind the Dollar

Mr. Jordan Lindsey, the founder of JCL Capital, has been urging forex traders to climb gradually toward success. He has shared, with all who are willing to listen, the correct method for building a million dollar trading account starting with $1000 and a dream. Patience and commitment fashion the road; compound interest is the vehicle.

Mr. Lindsey encourages traders always to have a plan. By sticking to that blueprint, you force yourself to remain on the path to your objective. His mantra has been “ Execution and follow-through create wealth.” While that is true, traders must understand the market, and what causes it to tick. That is the only way they can create a plan which can produce regular profits.

The foreign exchange market revolves around the world’s reserve currency, the U.S. Dollar. The forces behind the American currency are therefore enormously influential, and every forex trader needs to understand and appreciate them. Jordan Lindsey would advise that these macroeconomic considerations are essential if traders are to develop the necessary discipline to avoid making silly mistakes.

All of the major currency pairs are crosses with the U.S. Dollar. At the very top of the list are the following currency pairs:

  • EUR/USD
  • USD/JPY
  • GBP/USD
  • USD/CHF

These pairs account for the majority of the 5.3 trillion dollars that changes hands in the currency market each trading day. Notice that the USD is either the counter or the base to each of these pairs. It is fair to say that as the U.S. Dollar goes, so goes the forex market.

The source of the Dollar’s value is US interest rates, which are determined as a matter of policy by the Federal Reserve or “the Fed,” as it is commonly known. The Fed, like other central banks, can manipulate the value of the dollar by essentially adding money to the US economy. That process is known as monetary easing. It causes interest rates to fall. Thus the Dollar will decrease in value on the forex market against other currencies. When the Fed removes money from the economy, it is called tightening. Naturally reducing the number of Dollars in circulation will cause the Dollar to rise in value versus the other world currencies.

All markets are about supply and demand, even the currency market. According to Jordan Lindsey’s guidance traders must stay the course to be successful. Nothing can throw you off course quite like being blindsided by Fed news.

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