Not all money moves by international wire transfers. Western Union, Money Gram, and a whole host of other companies take cash from customers in one country and deliver cash in a different currency to receivers across the globe. Where the money goes and how much is being sent is a useful insight for Forex trading. Forex and transferring money in small amounts are related in exchange rates but also as measures of national economies. The trader can gain insight into Forex trading and foreign currency risk by looking at figures from Western Union money transfers.
When the recession started to take a serious bite out of paychecks in the USA with job loss a harbinger of things to come was that Western Union reported substantially less money being transferred to Mexico from the USA. Not long later the press reported that many Mexican workers, legal as well as illegal, were returning to Mexico as they could not find work in the USA. Then the press and government started talking about there being a recession in the USA and elsewhere. Forex strategy and the Forex news often have to do with just what news to watch. Being aware of the relationship of Forex and transferring money by huge numbers or people in small amounts can be very useful in Forex trading.
A trading analyst with Latin American roots once used the mango analogy for seeing news of markets before the traditional news sources. The analogy goes like this. There are large, old mango trees in the park. It takes a ladder, rope, and a lot of effort to get up these old trees to pick the mangos. When the economy is good no one bothers to pick the mangos in the park. When you visit the park one Sunday and all the mangos have been picked it means that there have been layoffs and men are climbing the mango trees to save money from going to the store. Depending upon whose opinion you listen to you may get the news before everyone else. Sometimes Forex trading and opinions has more to do with mangos in the park and the relationship of Forex and transferring money to Mexico than it does with articles in the Wall Street Journal.
Knowing where trading opportunities lie in the Forex market is one thing and knowing how to capitalize on that news is the other. Foreign workers leaving the USA, especially illegals, were an indication of the recession before it hit the government reports. Knowing how to use Foreign Exchange software is critical to success in capitalizing to Forex market opportunities. Trading software can access databases full of past market information, make rapid comparisons, and calculate odds of a currency pair moving out of its trading range or a currency reversing a long term trend. All of this happens within the time frame necessary to provide Forex trading options and to make trades. Having an intuitive insight into which currencies to trade coupled with a facility in the use of modern Forex trading software can lead to substantial profits in Forex trading. Just don’t forget Forex and transferring money through the likes of Western Union and don’t forget to look for the mangos in the park.