Fibo Quantum Download



Just as you would expect with anyone trading in equities, investors in the Forex market employ strategies to help them invest more successfully.  All of these strategies ultimately boil down to one thing:  trying to predict which way the currency exchange rates will fluctuate.  Predict correctly, up or down, and make a profit while we all know what happens when we are incorrect.  

When deciding whether or not to enter or exit a position in the Forex market, there are two basic types of analysis from which to choose:  fundamental or technical.  Investors who base decisions on fundamental analysis will look at interest rates and the overall economic performance of the nations in the currency pair when deciding when to sell and buy positions.  Technical Forex investors will look to trade based on price performance and chart patterns—so which is best?

Use of fundamental analysis such as the latest GDP figures may seem like a very logical approach when deciding when to buy or sell a position in the Forex market.  After all, we all know that stock prices are affected by economic data so it would stand to reason that the same would hold true for the Forex.  However, the Forex market has no central exchange with set hours so trading continues 24 hours per day except when shut down between Friday and Sunday and this makes a big difference between profitability and loss for small investors.

The small investor is a very, very, very small fish in a gigantic ocean full of larger investors.  By the time economic data and current events filter down to the small investor, all of the big players have already moved their currency and taken advantage of the information.  Day trading is a very dangerous game in the Forex because the market is so fluid and investors are highly leveraged so using fundamental analysis is a very dangerous strategy.

Technical Forex trading, however, involves the use of historical data to interpret present pricing trends and predict the future.  The moving average (MA) is the most common technical statistic used by Forex investors.  Presented in a graph or chart format, the moving average helps investors see the price movements of a currency pair for a given period of time.  A 10-day MA, for instance, will show an investor the daily open, daily close, high, low, and overall direction of a currency pair for a 10-day period of time.  It is called a moving average and favored by investors because it helps smooth out the noise of the price movements so an overall trend can be determined.

Technical trading involves entering or exiting a position based upon predetermined points by the investor.  For instance, some investors may favor a 50-day moving average (the larger the sample, the smoother the lines and the easier it will be to see a pattern) and will only buy once the price moves above a certain point on the chart.  Other variations on this statistic include:

• Simple Moving Average (SMA)—is based upon the closing price
• Exponential Moving Average (EMA)—assigns more weight to recent prices while lowering the importance of days further in the past

In the end, the technical Forex traders are trying to identify trends and then capitalize upon them.  The goal is to find the currency pair with the greatest pip movement and lowest volatility.  Technical analysis helps investors determine the emergence of new trends in currency pairs so that they can profit from them but no strategy will work with 100% accuracy because at the end of the day—the market is always right even when we believe our analysis is perfect!


Infinity Scalper Download

FX Atom Pro Download

Tagged with:

Filed under: Forex Technical & Fundamental Analysis

Like this post? Subscribe to my RSS feed and get loads more!

Possibly related posts

  • Fundamental Analysis Can Make Money In Forex When you are trading in the Forex market, you are attempting to predict long term currency trends utilizing basic financial data about the country pairs behind the currencies you are considering trading.
  • What is a forex Simple Moving Averages? Finally, the most important thing to remember when using the moving average technical indicator is that it’s always moving. Therefore, all the new candles on your Forex chart will have an effect on the MA. There are additional resources available if you want to know more about Forex simple moving averages.
  • Forex Technical Analysis & Forex Trading Indicators Technical Analysis helps us figure out how much money to risk on a trade. How and when to enter the market and how to exit the trade for profit or to minimize loss.
  • Fundamental Analysis For Dummies Fundamental Analysis For Dummies (9781119263593): Matt Krantz: Books
  • The Visual Investor: How to Spot Market Trends (Wiley Trading) The Visual Investor: How to Spot Market Trends [John J. Murphy] on . *FREE* shipping on qualifying offers. The Visual Investor, Second Edition breaks down technical analysis into terms that are accessible to even individual investors. Aimed at the typical investor–such as the average CNBC viewer–this book shows investors how to follow the ups and
  • Forex Technical Analysis Works In Forex Trading the key difference between technical analysis in the equities market, and technical analysis in the Forex currency trading market, is the fact that it is possible to participate in Forex trading 24 hours a day, seven days a week. That key difference is also the primary reason that technical analysis works so well in currency
  • Technical Analysis Demystified: A Self-Teaching Guide Buy Technical Analysis Demystified: A Self-Teaching Guide on ✓ FREE SHIPPING on qualified orders
  • A Technical Analysis Report on the Future Price Movement of EUR/USD A Technical Analysis Report on the Future Price Movement of EUR/USD – Kindle edition by Atul Shinde. Download it once and read it on your Kindle device, PC, phones or tablets. Use features like bookmarks, note taking and highlighting while reading A Technical Analysis Report on the Future Price Movement of EUR/USD.
  • Forex Scalping small—are made aware of the same information at the same time. Because small retail Forex traders are able to raise and move capital faster than larger institutional investors, they should have the advantage when it comes to taking advantage of short-term movements in exchange rates caused by the release of new information.
  • THREE LINES Forecasting Forex Price Action THREE LINES Forecasting Forex Price Action [R. Rana] on . *FREE* shipping on qualifying offers. Three Lines is a practical guide to foreign exchange trading that offers a simple strategy for forecasting future price movements based on the fundamental economic mechanism of demand and supply. Just a few years ago