Forex Fundamental & Technical Analysis | Debts

Forex Fundamental & Technical Analysis

Written by Hass 67

Thursday, 16 April 2009 15:04

by Hass67

Forex trading is the new fad in the investing public. You will find many new gurus in the market paddling their courses. If these gurus had been so successful at forex trading they did not need to sell forex trading courses.

Forex trading is being shown as so easy that anyone with a computer and an internet connection can do it from the comfort of their homes. No doubt, you can now trade forex from anywhere in the world. The internet revolution has made retail forex trading possible.

But nobody will tell you that out of 100 new traders; only 5 survive in the long run. Forex markets are brutal and unforgiving. Only the best will survive. 95 of the new traders will lose their money and quit in a few months or maximum one year.

Why so many new traders get slaughtered by the forex market? Simply; they were not prepared. By simply reading one or two eBooks on forex trading, you will never succeed at forex trading until and unless you start living and start breathing forex.

If you really want to succeed at forex trading than learn it properly. Understand how the forex markets functions. What is the role of underlying economic factors like interest rate, GDP growth rate, unemployment figures, fiscal deficit etc in moving the currency markets? As long as you wont get the feel of the markets, you wont succeed.

Learn fundamental and technical analysis. Some people say both are exclusive and require different strategies. But I say both supplement each other. Fundamental analysis can help you predict the general trend in the forex market in the medium to long run. Fundamental analysis studies the underlying economic factors that affect the currency markets.

Technical analysis is a more specialized field. It studies the movement of prices in the past to predict future prices. Forex markets are ideally suited for technical analysis. If you want to become a short term trader, then you will have to become an expert in technical analysis.

Technical analysis depends on the proper use of a number of indicators that you need to understand and master. These indicators can provide you will information regarding the market whether it is trending or ranging. This will help you devise your strategy. It can also tell you about the entry/exit for each trade.

If you have been previously trading stocks than you can switch to forex trading much faster. But always remember as long as you dont make forex trading passion of your life, you wont succeed at it. Learn everything about forex, make it a passion and you will develop into a winning trader.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in investing, stock and forex trading. Read about Forex Profit Accelerator. Know more Forex Strategies.