How How to Profit from Currency Trading The main factors influencing exchange rates are the balance of payments of a country, the state of the economy, implications drawn from chart analysis as well as political and psychological factors. In addition, fundamental economic forces such as inflation and interest rates are constantly influencing currency prices. Faith in a government’s ability to stand behind its currency also has an impact on currency price. Activities by currency managers, generally on behalf of an investment fund, have also become a factor moving the market. While they may behave independently and view the market from a unique perspective, most, if not all, are aware of important technical chart points in each major currency. As major support or resistance levels are approached, the behavior of the market becomes more technically oriented and the reactions of many currency managers are often predictable and similar. These market periods may result in sudden and dramatic price swings as substantial amounts of capital are invested in similar positions. Well advised individuals can profit from these fluctuations by buying a specific currency when it is weaker and selling it when it is stronger. The flexibility of the Forex Market also allows for an individual to “sell short”, or benefit from a market moving down in value. Spot transactions may last for only a few minutes, or as long as a maximum of 2 days.