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Posts Tagged ‘Fundamental Analysis’

If you have tested or do real trading for some times, you must realize that there are many forex trading strategies that can be applied. Each of it has its own advantages and disadvantages, ask for different data and condition, and will show its true potential in particular currency pair.

Basically, forex trading strategies can be divided into two major:

1. Technical analysis
This strategy is utilizing data as its main information source, especially charts to predict the future market movement. There are various methods to read this data such as candlestick charting or Elliot wave, but basically they search for patterns in the chart for a given time and looking for relationships between various indicators such as price and volume. You need the right tool for this, learn about it at technical analysis software.

This strategy is preferred by most traders and they use it in daily basis to decide the best transaction available currently. Usually, each trader has their own way to interpret the data by using various variables and designed specifically for a particular market he is in. These difference in methods make them have different winning rates even though they can access the same data; the trader with a better method will get more profits.

2. Fundamental analysis
This strategy is executed by analyzing various economy factors like interest rate, production, payroll, management, and overall state of economy to make entry and exit decisions. For example: some news such as Non Farm Payroll or Wholesale Inventories can affect the market greatly. If you can analyze the market movement before the news out, you can secure your position and wait for the profit.

Some times, some people with high influence in economy state will gather for an important meeting. For example, a meeting about deciding a new interest rate or inflation will have great impact in the currency values. Usually it will be already too late to enter the market when the result has been announced, so you have to use the current data to analyze and guess the result before.

Not only short term trading, fundamental analysis can also be used as a long term forex trading strategies. This is rather complex, but basically you predict the future trends of the market based on how the new policy will affect the market in long run.

There are also other methods in forex trading strategies aside from technical and fundamental analysis such as Scalping.

Scalping
Scalping is about making small amount of profits from time to time where it will reach significant amount when combined. A scalper will need to devote his time to keep watch of his open position, but it is easier now with the use of automated trading software. For example: When a trader who using scalping strategy sees a sharp movement in the market, he will use the opportunity to make profits even if it just 10 pips.

Not all traders can do scalping since it demands patience, quick decisions, and no emotion involved. A scalper will follow his proven strategy even if he sees opportunity to gain more; he will close the position, get small profit and move to the other potential transaction. Scalping can be very tiring and hard for a human trader, but not for a robot; read about the best scalping robot at FAP Turbo Review.

If forex trading is a new thing for you and you are still searching for applicable forex tradings strategies, I recommend learning technical analysis first since it is the foundation of almost all strategies. Another alternative: just go with a proven system, check it at best trading system.

Technorati Tags: Forex Trading Strategies, Fundamental Analysis, scalping, Technical Analysis

Forex Price Charts – Technical Versus Fundamental Analysis

Traditionally Forex traders were split into two camps.  Traders who prefer fundamental analysis and traders who prefer technical analysis.

So what’s the difference between the two camps?

Technical analysis is used more for short term currency movement predictions.  Traders track and predict short term market trends, and trade accordingly.

Fundamental analysis, is more suitable to making long-term forecasts, as it involves the analysis of economic factors and trends, that tend to be longer term predictions.

Technical analysts use forex charts to map trends and predict short term price movements. The charts are used to generate buy and sell signals.

You may have seen examples of forex charts on various web sites.  First appearances would indicate that the reading interpretation of the charts is very difficult and specialised. Actually forex chart interpretation is not actually that hard to learn.

Forex charts are basically a reflection of a country’s economy.  Economies are fairly slow moving entities,and have the tendancy to develop strong trends.  Whilst still volatile and risky, the forex market is less risky than say the stocks and shares market.  It’s these reasons that lead so many people to speculate in forex, often with good results.

Most brokers offer complimentary charting software with their forex platforms, which is sufficient for predicting currency pair movements, providing you know how to analyse the charts and understand the movements.

There are plenty of places online to learn the basics of technical chart analysis.  Alternatively you can just invest in a forex signals service that literally tells you when to buy and sell, so removing a lot of the hard work!

Forex Technical Analysis | Currency Trading

Forex Technical Analysis. EUR/USD is in an uptrend, after bottoming at 1.2331 (Oct.28,2008). Technical indicators are rising, and trading is situated between the 50- and 200-Day SMA, currently projected at 1.3292 and 1.4721. …   

Forex Technical Analytics | Currency Trading

Forex Technical Analytics. The pre-planned breakout variant for buyers was realized with attainment of minimal assumed target. OsMA trend indicator, having marked activity parity of both parties gives reasons for assumptions about …   

Technorati Tags: forex charting, Forex Price Charts, Fundamental Analysis, Technical Analysis