Fundamental Analysis in the forex
The main objective of the investors and the traders is to earn maximum profits in the forex trading with the help of the different plans and the strategies. The fundamental analysis is there from a very long time since the nineteenth century. The Fundamental analysis purpose is to forecast about the future forex market activities on the base of the economic news and the data gathered. The Technical analyses as well as the Fundamental analysis both are required for the smooth trading activities. Although the technical analysis gives much importance to the price while on the other hand the Fundamental analysis accounts for the entire political, social and the economic factors of the economy for meeting the conclusions for the currency pair of the forex market. Also, the major focus of the fundamental analysis is to recognize the most strong forces that are behind the price action and after that preparing the strategies and plans on that basis.
All the various factors in the fundamental analysis will play a role with the different points of time.
It becomes very essential to make a differentiation between the fundamental analyses in the trade forex market and the news trading. The forex markets instant response to the news and the events is typically irregular because there is no time for the evaluation and the assessment and preparation of the appropriate strategy very soon after the news release. The news trading relies more on the technical aspects rather than the fundamental analysis. In the fundamental analysis there is proper analysis and the study of the news data then after that it is worked upon to separate the important information from the irrelevant news.
Upon working on all the useful data of the forex news trading the bigger picture is prepared which can be put into use for the later parts of the forex trading for the future references. All of the economic happenings and the events act together because the single piece of information does not make much sense in the forex strategy if is used singly. The fundamental analysis is considered very tough but there are no proofs or the evidences for that.
Archived under Fundamental Analysis
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How To Blow Up Your Forex Account In A Few Simple Steps
After seeing new forex traders struggle, I’ve identified several common mistakes that often lead them to financial ruin. These mistakes can easily be avoided. Here they are:
1. Trading Small Time Frames. By trading the one, five, or fifteen minute charts, you’re trading more noise. This often leads to traders being whipsawed out of positions and sustaining multiple losses.
2. Using A Martingale Strategy. Doubling up after every losing trade. I guarantee you will lose 100% of your account if you use this disastrous strategy.
3. Not Using Money Management. Risking too much of your account on one or two trades isn’t a good idea. You will inevitably be wrong two to three times in a row and then your account will be depleted.
4. Using a 1:1 Risk To Reward Ratio. You have to take positions with tighter stop losses and bigger take profits to make money in the long run. Otherwise, you’ll never be able to recover after a few bad trades.
5. Using Simple Moving Average Crossovers. If developing profitable trading systems were this easy, we’d all be millionaires. Trading is much more complex than that.
6. Using Expert Adviser and Signal Services. If these experts could make as much money as they claim to, they wouldn’t be selling their services or signals for a few measly dollars per month. Ask for an audited track record and you’ll never get one.
7. Not Sticking To Your Strategy. The only way to determine if your strategy is profitable or not is to actually test it. Both backtesting and forward testing should be used. You have to actually stick with your own trading rules or you don’t know how the strategy actually works.
8. Not Using Stop Losses. It is amazing how many forex traders say they don’t believe in stop losses. All profitable traders who have been in the game long-term use stop losses. Simple as that.
To have a better chance of developing into a profitable trader, you should avoid these common mistakes.
Archived under Forex News