The Two Major Indicators For Simple Forex Trading Strategies
Fundamental analysis and technical analysis are the two basic areas of strategy in the forex market which is the exact same as in the equity markets. You will not be trained to be an expert in fundamental and technical analysis in this short course and you do not need to be one! All I’ll teach you here in this short course is to let you understand the basics of forex and a strategy that will start earning you money.
Fundamental Analysis
By using fundamental analysis in the forex market as the basis of the decision making process, traders predict future price movements by interpreting economic indicators, high impact news releases, government reports etc. Fundamental analysis is a difficult one, as it’s usually used only as a means to predict long-term trends. However it is important to mention that some traders do trade short term strictly on news releases. There are a lot of different fundamental indicators of the currency values released at many different times. Here are a few to get you started:
U.S. News:
• Non-farm Payrolls
• Purchasing Managers Index (PMI)
• Consumer Price Index (CPI)
• Gross Domestic Production (GDP)
• Durable Goods
These are not the only fundamental factors that you have to watch. There are still a lot more like the U.K news, European Union news, Japanese news etc. At certain times, you will notice that these economic indicators cause sharp price swings after they are released. A 100 pips move is even possible within half an hour time. For example when the Federal Open Market Committee (FOMC) changes or give comments on the interest rate, you might see a very volatile market.
Technical Analysis
Traders use technical analysis to predict future price movements solely by using and reading charts. They are known as chartist and are not concerned with the market fundamentals and only rely on certain technical indicators. The chartist believes that a chart will tell the past, present and the future.
By using technical analysis as the basis to trading decision, traders are able to profit consistently from short term market swings. No matter what time frame you choose, the markets move up, down and sideways and different strategies are used in these different market conditions.
The trader has to be able to identify the type of market that he is dealing with in order to apply different types of strategies. The strategy that I’m going to reveal to you later will also be based on technical analysis with a combination of some indicators. Some of the common forms of technical analysis used in forex trading include:
• The Trend
• Support and Resistance
• Fibonacci Studies
Are you interested in automated forex trading, making huge money with forex fast, and live your lifestyle? Are you sick of “gurus” trying to sell you the latest get rich quick online deal? Get educated, it’s the key to real online wealth.
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