Major factors you need to know about Forex
Forex market is by far the world’s biggest market place. More traders and more money are traded in Forex on a daily basis than any other market in the world and it is not showing signs of slowing down. With this in mind we have compiled together a list of some basic factors that you should know about before getting involved in this market.
Do not make the mistake of treating this market like a casino because it will bite you sooner than you think. You may even get lucky a few times but in the long-run you are more likely to exhaust your whole trading account. It is because of this that you should get involved into some format of Forex training. You may want to take a course, read a book or simply watch some videos but whatever you do make sure that you surround yourself with knowledge that should play an important role in saving your capital. Ensure that throughout Forex training you practice your strategies and test them to ensure you get good results. It is only after this stage that you should involve yourself in the live markets.
This type of analysis focuses on charts and the patterns they provide for us. Markets/prices will produce various trend and reversal patterns that technical traders use in order to get into the market. It is these chart patterns that you should learn throughout Forex training and pick one or two to master in order to trade effectively.
This type of analysis tends to be used in large trading houses or hedge funds. Simply put, fundamental analysis focuses on economic data that is released on a daily basis. It is the interpretation of this data that nudges traders to buy or sell. If the data is interpreted correctly then big profits can be made and quite quickly too. If data is interpreted incorrectly, then big losses could be around the corner.
There are hundreds of these around and you must ensure that you use and find the correct one for you. Forex brokers have been getting a bad name in the recent years because of their ability to alter market conditions, hence ‘make’ traders lose money. Not all Forex brokers are the same but it does pay to be slightly cautious and patient when doing your search.
Again, this is a skill that you must master in your Forex training, before you even dive into the live markets. The ability to handle losses and manage your capital accordingly is a skill that around 90% of traders fail to acquire. Do not become one of those traders and ensure you are not emotionally attached to the market. If you are, it may come back to hurt you in a very big way.
The above is just a start to your trading career. A lot more has to be achieved in order to be a successful trader but the above factors are the major and the most basic ones that you must be aware of.