http://www.theforexnittygritty.com/
Foreign Currency Trading
By www.TheForexNittyGritty.com
Foreign currency trading is essential for foreign trade. After the USA went off the gold standard in 1971, the US dollar and other currencies have floated on the open market. Forex markets evolved around the world in order to facilitate the purchase or sale of one currency for another. The main sites of foreign currency trading are the London, New York, and Tokyo Forex markets. Each is open every business day of the year during business hours. Because these markets are scattered across the globe, day trading Forex is possible around the clock on business days. The bulk of Forex trading is done by those whose business requires the conversion of one currency to another. However, speculators in the Forex markets provide liquidity while trading foreign currency in search of profits.
The Fundamentals
The eventual price of one currency compared to another has to do with the strength of the two economies, balance of trade issues, employment, monetary policy, and national politics. These are the fundamentals. Although currency speculation may take prices higher and lower on a short term basis, fundamental analysis of Forex pairs is essential for a trader to understand the range in which a currency will trade. Depending on the strategy that one wishes to follow in foreign currency trading either fundamentals or technical aspects of Forex trading will be more important.
Market Sentiment and Technical Analysis
Technical analysis of Forex pairs is the key to short term profits in trading foreign currency. Prices move up and down during the day, week, and month. The secret to technical trading is that price patterns repeat themselves. The underlying fundamentals may vary but the market has tendencies that are not only repetitive but predictive as well. Speculators engage in profitable currency trading by use of technical analysis tools such as Japanese candlesticks, visual signals superimposed on the Forex price chart. For a technical analysis tool to be useful it must be accurate, easy to read, and timely.
The point of technical analysis is that the first section of a given price pattern predicts the remaining portion. The most profitable technical signals are reversal signals which tell a trader that a bull market will turn into a bear market or a bear market will turn up and become a bull market. The point of technical analysis, as well as fundamental analysis, is to recognize opportunity when it arises.
Smart Forex traders learn to trade only when fundamental and technical signs are clear. Smart traders typically trade less in trading foreign currency and have a much higher profit to loss ratio than traders who cannot keep their hands off the market, so to speak.Keeping Track of Trades. No one ever makes money on every trade. No strategy is perfect for trading foreign currency.
2. Foreign currency trading is essential
for foreign trade.
http://www.theforexnittygritty.com/
3. After the USA went off the gold
standard in 1971, the US dollar and
other currencies have floated on the
open market.
http://www.theforexnittygritty.com/
4. Forex markets evolved around the
world in order to facilitate the
purchase or sale of one currency for
another.
http://www.theforexnittygritty.com/
5. The main sites of foreign currency
trading are the London, New York, and
Tokyo Forex markets. Each is open
every business day of the year during
business hours.
http://www.theforexnittygritty.com/
6. Because these markets are scattered
across the globe, day trading Forex is
possible around the clock on business
days.
http://www.theforexnittygritty.com/
7. The bulk of Forex trading is done by
those whose business requires the
conversion of one currency to
another.
http://www.theforexnittygritty.com/
8. However, speculators in the Forex
markets provide liquidity while
trading foreign currency in search of
profits.
http://www.theforexnittygritty.com/
9. The eventual price of one currency
compared to another has to do with
the strength of the two
economies, balance of trade
issues, employment, monetary
policy, and national politics.
http://www.theforexnittygritty.com/
10. These are the fundamentals.
http://www.theforexnittygritty.com/
11. Although currency speculation may
take prices higher and lower on a
short term basis, fundamental
analysis of Forex pairs is essential
for a trader to understand the range
in which a currency will trade.
http://www.theforexnittygritty.com/
12. Depending on the strategy that one
wishes to follow in foreign currency
trading either fundamentals or
technical aspects of Forex trading
will be more important.
http://www.theforexnittygritty.com/
13. Technical analysis of Forex pairs is
the key to short term profits in
trading foreign currency. Prices move
up and down during the day, week, and
month.
http://www.theforexnittygritty.com/
14. The secret to technical trading is that
price patterns repeat themselves.
http://www.theforexnittygritty.com/
15. The underlying fundamentals may
vary but the market has tendencies
that are not only repetitive but
predictive as well.
http://www.theforexnittygritty.com/
16. Speculators engage in profitable
currency trading by use of technical
analysis tools such as Japanese
candlesticks, visual signals
superimposed on the Forex price
chart.
http://www.theforexnittygritty.com
/
17. For a technical analysis tool to be
useful it must be accurate, easy to
read, and timely.
http://www.theforexnittygritty.com/
18. The point of technical analysis is that
the first section of a given price
pattern predicts the remaining
portion.
http://www.theforexnittygritty.com/
19. The most profitable technical signals
are reversal signals which tell a
trader that a bull market will turn
into a bear market or a bear market
will turn up and become a bull
market.
http://www.theforexnittygritty.com/
20. The point of technical analysis, as
well as fundamental analysis, is to
recognize opportunity when it arises.
http://www.theforexnittygritty.com/
21. Smart Forex traders learn to trade
only when fundamental and technical
signs are clear.
http://www.theforexnittygritty.com/
22. Smart traders typically trade less in
trading foreign currency and have a
much higher profit to loss ratio than
traders who cannot keep their hands
off the market, so to speak.
http://www.theforexnittygritty.com/
23. No one ever makes money on every
trade.
http://www.theforexnittygritty.com/
24. No strategy is perfect for trading
foreign currency.
http://www.theforexnittygritty.com/
25. As such smart traders keep track of
their trades and study them, both the
winners and losers.
http://www.theforexnittygritty.com/
26. It is by this sort of results based and
process based audits of Forex trades,
that traders improve their
performance, and their profits in
foreign currency trading.
http://www.theforexnittygritty.com/
27. For more insights into Forex and
Forex trading, visit
www.TheForexNittyGritty.com.
http://www.theforexnittygritty.com/
