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Posts Tagged ‘Trading Strategies’

Analyzing Your Forex Trading Strategies

PostDateIcon May 15th, 2009 | PostAuthorIcon Author: Robert

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There has to be strategy when it comes to Forex trading and the two basic areas of this strategy is fundamental and technical analysis. The difference between these two strategies is the fact that most of the individual forex traders on the market today use the technical analysis strategy. You need to understand both strategies in order to pick the right one for your trading needs. The fundamental analysis is placed on a large spectrum and based on long term trends that will happen in the marketplace. It is the value of a country instead of specific companies. There are some traders who use this strategy but on a short term basis relying on news releases.

The technical analysis strategy of forex trading is used by traders who do not see the market as a whole. They do their trading on price trends that are current. The difference between this strategy with the Forex market and the strategy used within the equities market is the time span that the process takes which could be very substantial since the market is open 24 hours a day. Some of the technical analysis strategies may have to be switched up because of the 24 hours.


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PostCategoryIcon Posted in Forex Strategy, Forex Trading

Understanding Basic Forex Strategies – Fundamental Vs. Technical

PostDateIcon May 15th, 2009 | PostAuthorIcon Author: Robert

A person that is new to the world of FOREX trading needs to understand the difference between the two basic trading strategies. Fundamental and technical strategies are quite different from each other and a person needs to stick with one plan. Technical analysis is the more common strategy used by FOREX traders, likely due to its more simplified form. An overview of both strategies is provided below for an accurate understanding:

Fundamental Analysis – A person that has decided to use this style of analyzing is essentially putting a value on an entire country, a much more difficult decision. This style of analysis is much harder for a person to learn and is often left for only long term trend prediction. It may at times be used on the short term and several different indicators come in the form of news releases. These include the Consumer Price Index, Purchasing Managers Index and many other indicators. There are also timely meetings that affect the markets. A person that is using this strategy needs to be aware of these different meetings and how the discussion of interest rates, inflation and other issues will affect currency values in the country and around the world. The two most important meetings that affect currency values are the Humphrey Hawkins Hearings and the Federal Open Market Committee. An understanding of these two meetings will allow a FOREX trader to foresee long and short term trends. An economic calendar will keep a person aware of the times that these reports are issued and is essential for anyone following this strategy.

Technical Analysis – This is far more common of a strategy for FOREX traders. Analyzing price trends is done on a 24 hours basis since FOREX markets are open around the clock, unlike the equities markets. Since FOREX markets run on a 24 hour cycle, adjustments must be made to any technical analysis that are limited by time factors. Three common styles of analysis include the Fibonnaci Studies, Parabolic SAR Pivot Points and the Elliot Waves. These are all basic strategies of their own and must be decided between. The best place for a beginner to start is with the one that makes them most comfortable. A quality broker will help to explain the differences and help a person to choose the right one for them and their circumstances. Being comfortable with an investment strategy is the only way a person will ever get started.

PostCategoryIcon Posted in Forex Strategy

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