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FOREX trading refers to an international, 24/7, over the counter, exchange market where currencies of different nations are bought and sold. Trading is always done in pairs assuming the price of currency bought to go up and that sold to fall down. It is the largest liquid financial market making it impossible for any single investor to influence the prices of currencies.

There are two kinds of FOREX investing strategies:

TECHNICAL ANALYSIS
FUNDAMENTAL ANALYSIS

TECHNICAL ANALYSIS:

Technical analysis is mostly undertaken by small and medium size investors.
A technical analysis considers factors that are actually affecting the market rather than factors that can affect it. Thus the price quoted reflects all the factors that have influenced it. Only market generated facts and figures are taken into account and factors like fear, hope, expectations or other changes are not considered. Thus the analysis is generally based on these suppositions:

Price reflects all actual market movements. That means price includes everything known to the market like supply and demand of foreign exchange, political factors, trade agreements etc. It is not concerned with what resulted in change rather deals with actual changes. It works on the assumption that price can take only one of the three directions:

 Upward
 downward
 sideward

It rest on those market patterns that have been identified as significant. That means those factors which are repetitive in nature or will produce desired results.

History always repeats itself as human psychology changes very slowly with time. That is market movements are predictable.

VARIOUS TECHNICAL INDICATORS ARE:

1. RELATIVE STRENGTH INDEX:

It takes into account the ratio of upward and downward movements in index and expresses it in the range of zero to hundred.

2.CHARTS:

Charts include various hills, slopes, curves that develop on a chart over a time and reflect some major and minor changes in pattern. Some of the chart formations include:

TRIANGLE
RECTANGLE
HEAD AND SHOULDERS
DOUBLE TOP AND BOTTOM
SAUCERS
V

3.GAPS:

A gap represents area on a bar chart where no trading took place.

UPGAP: it is formed when the lowest price on a particular day is more than the highest price of previous day.

DOWNGAP: it is formed when highest price of a certain day is less than the lowest price on previous day.

NUMBERS:

Various number theories are used in technical analysis like:

Fibonacci theory
GANN

STOCHASTIC OSCILLATOR:

This indicates the overbought or/and undersold condition. It uses a scale of zero to hundred percent.

FUNDAMENTAL ANALYSIS:

It is the one where current economic, political, financial situation of the country of currency is studied. A country’s economical and political condition depends upon many factors like the interest rate, unemployment level, exports and imports, per capita income, percentage of population living above and below the poverty line, inflation, trade relations with other countries, tax policies etc.

A fundamental analyst studies and evaluates all these factors before coming to any decision. Thus it helps in long tem decision making and making profits in short term by extra ordinary developments.

Some of the indicators that help in fundamental analysis include:

1. GROSS DOMESTIC PRODUCT:

It reflects total market value of all the goods and services produced in a country during a given year.

2. RETAIL SALES:

This reflects total receipts by all the retail stores in a country.

3. CONSUMER PRICE INDEX:

It reflects change in prices of consumer goods.

4. BUSINESS CYCLE:

It reflects various phases through which a business passes. These phases include:

EXPANSION
PEAK
RECESSION
DEPRESSION

5. MONETRY POLICY:

It controls the supply of money in an economy.

Trading successfully needs knowledge, time and understanding of a market. You cannot earn continuously in a Forex market due to its volatile nature. Thus as a trader you should try to consider both technical and fundamental strategies of forex trading and make decision based on market expectations and trends. Try trading with money that you can afford to loose without any regrets. Trade with logic and if you are not sure quit and take rest for some time.

By: Willie Reynolds -

Article Directory: http://www.articledashboard.com

Willie Reynolds maintains a site offering free Forex tips.

   

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Forex Ambush is the best automated system to make money trading Forex.

• Click here to read our Forex Ambush Review.
• Click here to go directly to the Forex Ambush site.
  

Proper training is a must if you are going to be trading. There is a lot of money involved in forex trading. Without properly learning the forex market and how to trade forex, you can really lose a lot of money. However, you can also really make a lot of money once you know what you are doing. 90% of traders actually lose money in the forex market leaving only 10% of traders making money. Do you want to be part of the 90% or 10%? It is really up to you. Get the proper training to learn the forex market and start making money by trading forex. With the right training, you can learn how to start making money by trading forex in your very first month.

If you don’t even know what forex trading is at this point, you definitely need to get some proper forex training to learn it. To summarize what forex trading is, it is pretty much trading, or exchanging of one countries money for another countries money.

There are many places to get good forex training. There are also many places that can offer you poor forex training. There are many poor training systems out there that just want to take your money. However, there are also training systems out there that will actually teach you the forex market and show you how to trade so that you will make a profit.

The first thing you should learn is what forex trading actually is and how it works. The forex market is always changing so you need to be updated with the latest information and news regarding it. After understanding the basics of how the forex market works, you should then start learning more in depth detail of how to trade and earn a profit. While you are still learning how to trade forex, you should never manage an actual account. You should always start with a demo account before you actually try it for real and manage a real account.

For more information on where exactly to get the proper training needed to trade forex, visit http://www.netearnings.biz/forex/index.html

 

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Forex Ambush is the best automated system to make money trading Forex.

• Click here to read our Forex Ambush Review.
• Click here to go directly to the Forex Ambush site. 

As you read forex charts, remember that the two fundamental approaches for online forex trading: fundamental analysis and technical analysis.

Fundamental analysis doesn’t rely on forex charts. It scrutinizes political and economic indicators to determine trades. Charts here are deployed as used as a secondary reference.

Technical analysis on the other hand, attempts to predict price swings by analysis of historical price activity. Those who use technical analysis study the relationship between price and time.

The most actively traded pair of currencies is the Euro and the US dollar, so we will use them in our example. The dollar is on the right hand side of the chart and the Euro is on the left hand side. The currencies are expressed in relationship to each other in pairing. Forex charges will always display how much of the currency on the right hand side is necessary to buy a unit of the currency on the left side. Looking at the typical EU-USD, chart you will notice the last price displayed per given date. This number is always emphasized. The time is tabbed horizontally across the bottom of a chart and the price scale is displayed vertically along the right hand edge of the chart. The time and the price are set in all caps to help the trader remember that technical analysis rests upon the relationship between time and price.

The trader observes the price and time movement on a chart. These include bars, lines, point and figure, and Japanese candle sticks– the most favored method. With the candlestick method there is a large, red section that is the body of the candlestick. Lines protrude from the top and bottom and they are the upper and lower wicks. When you look at all the candles on a chart it is apparent that bodies come by difference sizes. Sometimes no body exists at all.

The same is true with wicks. Candle wicks come by many difference sizes; there may be no wick at all. The length of the body and the length of the wick are determined by the price range for the candle. Longer candles will have had more price movement during the time that they were open. The top of a candle wick is the highest price for that currency while the wick’s bottom is the lowest price. A currency is bullish when the close of the candle is higher than the open. In simple terms this means that there were more buyers than there were sales during the opening time period. Sometimes the candles will not have wicks. The price opened and it dropped off until it closed.

Forex charts don’t offer bullet proof trading hints, but they can help a trader. Past trends do have their place in forex trading as most traders will admit, and using the charts to track historical trends can assist a trader in making a snap decision.

The online investor typically joins a service that provides realtime charts that updates on currency activity. Charts can be checked on a minute to minute basis. For those who primarily do their trading based on historical accuracy this can ease the burden of prediction.

Most forex traders however use a combination of fundamental and technical analysis. They may chart historical trends, but they will also pay close attention to political, cultural and economic indicators within a region. They might use charts and other techniques to check correlation between political climate and currency fluctuations. But even the most sophisticated technical analysis software or tool has its limitations. A trader must be prepared to take risks… and invest money that is not needed for the immediate future.

By: Joseph Plazo -

Article Directory: http://www.articledashboard.com

A master of manifestation to his associates, Joseph R. Plazo offers intense executive coaching so people can find jobs and build careers.

 

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