What You Should Know About Learning How to Trade on the Forex Market


When it comes to learning how to trade the forex market, you have to decide which way you'd like to analyze the market. You either have to learn about technical analysis or fundamental analysis. There are certainly some traders who have a strong grasp of both, but for the most part, the majority of traders tend to focus on one or the other.

Unfortunately, I do not think many traders out there even take the time to learn one or the other. It may seem strange but many traders like to trade using their "gut" instead of properly analyzing the markets. I know it sounds absurd but its true.

There are a ton of traders who do not even understand the basic fundamentals when it comes to economic news events. For example, a lot of forex traders do not know the significance of the Non-Farm Payroll numbers that come out the last Friday of every month. A lot of traders do not know whether a rise or drop in interest rates will have a positive or negative effect on a currency.

It honestly would not be that bad if traders took the time to understand about technical analysis. But, unfortunately most do not. I can not tell you how many traders think that technical analysis refers to looking at a stochastics indicator and seeing if the market is oversold or overbought.

The truth of the matter is that most indicators do not provide any kind of technical analysis. The main reason is that they are all lagging by nature. They are good for telling you what has already happened. But as far as what will happen ………. not so much.

If you really want to learn about technical analysis, clear all your charts of indicators try to understand what price movement is all about.


Source by John Templeton

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