Choosing Forex trading strategies

Technical and fundamental analysis – the two main strategies in the Forex market, as well as in the equity markets. However, technical analysis is by far the most common strategy among individual forex traders. Next, read a brief overview of both types of analysis and description of how they relate to trading in the Forex market:

Fundamental analysis

If you think that evaluate a company is difficult, you should try to evaluate the whole country instead. Fundamental analysis in the forex market is often very difficult, it is typically used to predict long-term trends. However, it should be noted that some traders make short-term trades, based on the latest news. There are many different indicators of the fundamental value of the currency, produced at different times. Here are a few to start:

* The number of new jobs (Non-farm Payrolls)

* The number of new jobs (Non-farm Payrolls)

* The consumer price index (CPI)

* Retail sales

* Durable goods

You have to remember that these reports – not only the fundamentals, for which you need to follow. Besides these there are still a variety of activities, which you can read the comments and information which could have the same impact on the market, as any report. Such events (meetings) are often held to discuss interest rates, inflation, and other issues that could have an impact on exchange rates.

Even differences in the wording of the same applications, such as comments Chairman of the Board of Governors of the Federal Reserve on interest rates, could adversely affect the market volatility. Do not miss the two important events – the Federal Open Market Committee of investments and the Humphrey Hawkins Hearings.

After reviewing the reports and commentaries, Forex fundamental analysts can better understand any, including the long-term, trends. Short-term traders it will make a profit as a result of market impact of unforeseen events. If you decide to stick to basic strategy, you should always keep on hand the economic calendar to be aware when there are all these reports. Your broker can also provide you with relevant information of this kind.

Technical analysis

Just like their counterparts in equity markets, technical analysts in the Forex market analyze price trends. The only significant difference between lies in the time frame technical analysis on Forex and stock markets (Forex market is open 24 hours a day).

Because of this, some form of technical analysis, tied to a time frame should be modified for use on the clock Forex. Here are the most common form of technical analysis used in Forex:

* Elliott Wave

* Fibonacci Tools

* Parabolic indicator (Parabolic SAR)

* The pivot points (Pivot points)

Many technical analysts tend to combine the technical tools to make more accurate prediction for you. (The most common method – a combination of tools Fibonacci Elliott wave). Others prefer to create trading systems to re-discover the best conditions for the purchase and sale.

Choosing your strategy

Most successful traders develop a strategy and bring it to perfection for a certain period of time. Some people will focus on one particular study or instrument, while others will take advantage of a wide range of analysis as a determinant of the trading agent. Most experts suggest you to use a combination of fundamental and technical analysis, with which you can make long-term forecasts and to determine entry and exit points. Of course, in the end, every trader decides what is right for him alone.

When you are ready to start trading in the Forex market, you need to open a demo account and start trading training to practice as long as you learn to receive a stable income. Many people who fail tend to “jump” to the market and quickly lose large amounts of money due to lack of experience. It is important to take the time to learn trading before investing.

You should also be able to trade without unnecessary emotions. You will not be able to keep track of all the stop-loss point, if you can not fulfill them on time. You should always set your stop-loss and Take-profit to run automatically, do not change them unless absolutely necessary. Make a decision and do not change it. Otherwise you go mad and will bring to mind their brokers.

You have to understand, and the need to follow trends. If you go against the trend, you risk your money, because the Forex market trend is stronger than anywhere else. Trading in accordance with the trends, you get more chances of success.

The Forex Market – the largest market in the world, with each passing day increases the interest in it, more and more people are interested in trading on it. Before you start to engage in trading, make sure your broker meets specific criteria, and take the time to search for a trading strategy that is right for you.


James Ann. Hyerczyk has worked as a fundamental and technical financial market analyst since 2001. His technical work features the pattern, price and time analysis techniques of W.D. Gann.

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