What is the best forex strategy? THE forex strategy does not exist, but all successful strategies have one thing in common: swimming with the stream. The price of a currency pair in the forex market comes into being, and on the market, there is the law of supply and demand. For example, if many people believe that the rate of the euro against the dollar will rise, they will go long on the EUR / USD (euro-dollar currency pair). This naturally pushes the price of this currency pair up, so indeed the euro will appreciate against the dollar. If you have a position, it is important that you can estimate what the market is doing and then do the same. There is no place for criticism, because the market is always right; the forex prices will anyway with the crowd moving, even though there is really no good reason.
50 euro free markets
Assessing what the forex market is going to do seems easier than it is, because you're not on a square full of people who through their hands to show or stabbing them to buy or sell. As you are all those other millions of Forex traders their PC at home or at their office and place orders without you there to view it. However, there are ways to predict what these people do: fundamental analysis and technical analysis. Here by developing a better understanding than the rest of the market, you learn faster and better predict what a currency exchange rate will do.
Fundamental analysis and Technical analysis
In general there are two big with Forex 'schools' distinguish when it comes to obtaining information, that of fundamental analysis and technical analysis
Fundamental analysis
Secretly you earlier in this Forex course is already acquainted with fundamental analysis. This is because the study of actual events on the economic, political and international level and interpreting the effects this has on exchange rates. Simply put: to investigate the influence of the news. This is exactly how we determined which positions the previous lesson we wanted to take.
Technical analysis
Technical analysis is considered the more successful of the two methods, although at the time everyone agrees is that successful traders both schools mixing together to determine their trading strategy. Technical analysts do not look at actual events, only to the pricing of currency. The idea behind this is that all developments in the economy eventually the price will be processed and therefore contain only the price trend is to deduce what a currency pair in the future will do.
The six main numbers for technical analysts:
Open: the opening direction at the beginning of a period
High: the highest rate recorded within a period
Low: the lowest rate recorded within a period
Close: the closing rate at the end of a period
Volume: the number of transactions throughout the market within a period
Open Interest: The total number of open positions across the market at a time
Because Forex is an open market (in contrast to the stock exchange), is to analyze the last two digits (volume / open interest) is very complex. The first four are, however, easy to follow. Forex traders even use special graphs (candlestick charts) that these figures for each period precisely. In the forex articles advanced, you will encounter later on exactly how those graphs are put together and how they can read.
Technical analysis in practice
To get a picture of the kind of information as you can get technical analyst from graphs, below is an example. It is a chart of the currency pair GBP / USD you remember what those abbreviations stood for?-Over the past seven days. You open such a graph by the client on the eToro "FOREX CHARTS 'button. Below you can then set any currency pair you wish to view the graph. If you are using the graphics have come to a conclusion about the position you want to open one, you can also order directly enter through the button "Open Trade". (Incidentally, if you eToro client had not yet downloaded, you can do that here.)
From this graph you can do two important things distract you. First is the GBP / USD (pounds dollars) clearly in a uptrend. That is to say, the pair is itself quite a while to the upward movement. Because trends are more likely to continue than reverse, this is an argument to further increase speculation.
Second, does the trend occurs within a limited "channel". This is a bandwidth, here about 100 pips wide, within which the currency pair fluctuates back and forth. Because there is an uptrend is the bandwidth yourself up slowly. You see that whenever the currency pair the top or bottom of the bandwidth tap, course, back to the other side moves.
At the present time-this is the right end of the chart is the price in the middle of the channel, making it difficult to decide on what will happen hereafter. No good time to open a position so. But at the circled points in time tapped the price chart the trend channel, which was to be expected that at least in the short term a move in the opposite direction would come. The first and fourth points were good times to open a long position to speculate on a rise. The second, third and fifth point lent itself to a short position to speculate on a decline.
In the forex articles get much more advanced techniques that will allow technical analyzes. Keep in mind that you are not too much time on your hay fork takes. When you first hundred pages of technical indicators by themselves without ever reading a trade to have done, you will notice that it is just confusing. Instead, try to first have a couple of trades based on trend analysis. If you think a bit in the fingers can get a new technical indicator to your arsenal and thereby exercise. So expand your doing your knowledge still further and maintain the overview.
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