Jun 27 2009
Forex traders base their trading decisions on either technical indicators on their charts or on the trends in economy. Therefore there are two major way to analyze the currency movement: technical analysis and fundamental analysis.Below are my thoughts and my
currency trading tips.
You may wonder which approach of market analysis to take. It is really up to your personality. There are many traders who trade only using technical indicators and think that making decisions based on fundamental factors is not profitable. However there are other traders who may think the opposite way.
Forex traders who use the technical analysis will argue that only chart patterns and indicators will give you the reliable signals by showing you the charts. However those traders who use fundamental analysis can show you how the economic news releases move the price. By knowing the certain fundamental parameters you can predict which way the price will go.
It may seem that fundamental analysis is more reliable. But the technical indicators and chart patterns also give you reliable signals if you learn how to recognize them. Technical analysis is especially valuable when there is no fundamental factors currently influencing the market.
If you use only technical analysis by identifying the technical patterns and not paying attention to the fundamental factors, then any major economic event can move a currency pair against your position. There are indeed some regular economic news releases that can move a currency pair up to 100 pips in a matter of few seconds.That's the reason why you need to
learn Forex trading.
Fundamental news releases not only move the currency pair for very short period of time, very often that strong movement will set the price movement direction for much longer time. Therefore following the local and worldwide economic and political news is the way to predict the currency price movement. However the technical analysis give you the exact points to take profitable trades.
Price movement is never a straight line. Price will go up and down. It's true that economic factors are behind those movements. But technical analysis can also predict how long the movement of the price due to a fundamental news can last and pinpoint the exact entry and exit points.
That's the reason why most successful traders pay attention to technical analysis as well as to fundamental one. It is always best to have a balanced approach. Nowadays a lot more traders use only technical analysis. If you one of them at least know the schedule of the major news releases to adjust your trades properly.
Read competent information about
forex managed account - welcome to your own knowledge base.
Jun 27 2009
As you may know currency market as any other market is analyzed by looking at charts and technical indicators as well as looking at the overall economic picture. The first way called technical analysis and the second one is fundamental analysis.Below are my thoughts and my
Forex trading tips.
You may wonder which approach of market analysis to take. It is really up to your personality. There are many traders who trade only using technical indicators and think that making decisions based on fundamental factors is not profitable. However there are other traders who may think the opposite way.
Fundamental traders will show you how economic news cause the high volatility of the price. On the other hand technical traders would show you the indicator patterns that give the buy or sell trading signals. And both of them will be right.
Some people looking at the volatility caused by the economic news releases may think that it's the most reliable approach to trade in Forex. However the technical analysis patterns are also very reliable if you know how to recognize them. Technical analysis is very valuable when there is no economic news around to make a huge impact on the market.
That's why you don't have to rely only on one type of market analysis. If you use only technical analysis any significant economic news release will destroy your analysis and chart patterns. That may lead you to sustain a big loss.That's the reason why you need to
learn trading Forex.
Following the worldwide economy and politics can help you to predict the price of the currency pair. The fundamental news releases not only move the price of the pair in a short term but they can set up the direction of the movement for the longer period of time. And during that period technical pattern recognition will help you identify profitable trades.
Price in Forex market always moves up and down. Fundamental traders are right it is the economic factors behind the big movements. But it is the technical analysis that can estimate how long the momentum of the movement set by an economic news can last. It can give you the exact levels to place your orders.
That's the reason why most successful traders pay attention to technical analysis as well as to fundamental one. It is always best to have a balanced approach. Nowadays a lot more traders use only technical analysis. If you one of them at least know the schedule of the major news releases to adjust your trades properly.
Read helpful experiences for
forex managed accounts - welcome to your own knowledge base.
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