Forex Trading for Dummies
If you have never heard of Forex before, then this article that could be called Forex For Dummies will begin to tell you all about it. Forex is a word made up of two words: Foreign Exchange, thus Forex is all about trading currencies. Trading currencies is what permits a business to exchange their currency to a foreign one. For instance a European maker of goods will pay a US business for parts in US dollars, even though their currency is the Euro. Once the province of the world's largest banks, as well as assorted billionaires, Forex can now actually be traded by "Joe Blow" in the privacy of his own home on his home computer. I can hear your comment now, "But I don't know anything about foreign exchange!"
Part of the attraction of Forex is that learning the ins and outs of Forex is made relatively easy by the number of tutorials available, and the fact that so much information is readily available on the Internet. There are a number of reasons why Forex trading is exciting too, for instance:
* No geographical impedance: It does not matter where a trader is located, whether in the Alaskan wilderness or in the Gobi desert, as long as there is a good Internet connection, trading can be performed.
* Uninterrupted business process: The foreign exchange market is open and performing business 24 hours a day, except on weekends, thus it is an uninterrupted process, unlike the stock market which closes every day.
* Liquidity: Because there is a constant demand for foreign currency exchange, the market is inherently liquid.
* Diversity of the dynamic: The foreign currency market is affected by weather, politics, economic growth or decay, inflation, destabilization of governments, interest rates, business cycles and trends, and employment/unemployment, to name only a few.
* Leverage: The foreign currency market lends itself more to the use of leverage than any other type of market, thus clearing the way for huge profit margins with low investment accounts.
Considering how many factors can affect the currency market leads investors to make predictions on the exchange rates constantly. The predictions often entail the use of algorithms since supply and demand of funds can be predicted with a good degree of accuracy. What this means is that in essence there are computer programs used to make investment decisions, thus creating software robotic management.
วันศุกร์ที่ 5 มีนาคม พ.ศ. 2553
Some notes about Forex trading and Forex charts
Some notes about Forex trading and Forex charts
To control the market, forex traders need to have a very good knowledge of the forex charts. There are few tools available in the forex trading market which can help you track these charts. The success rate of forex traders depends heavily on understanding these charts, and their reaction time to the changes in this market. However, some automatic tools will control your trading without looking at this forex chart. These forex charts are still technically strong tools that will provide you with the trading data during the trading hours of the day.
What are forex charts?
These charts show the patterns and the current positions of currencies in the market. They show the currency format like this: JPY/USD. JPY represents the Japanese Yen and USD represents the United States Dollar. The forex chart shows how the two currencies compare, depending on the market situation. This chart gives you a review of the trading that happened during the course of the day. The Forex chart gives all the information from the opening range of trading, the trading in between, to the trading range by the end of the day.
You can also check the weekly, monthly and yearly status for the markets from these forex charts, too. A casual look at this chart tells you what happened in the forex trading market that day. You can adjust the timeframe at the bottom to monitor the current trends in a given day. There are 3 different types of forex charts available these days. They are the Line chart, the Point and figure chart, and the bar chart. You can learn about these forex charts in very short time if you can carefully follow your forex broker.
Where are they to be found?
The forex chart for a particular currency pair can be tracked even on the internet. Business news also provides an overview of the latest trends, often on television. Stock markets also use these types of charts. If you are well aware of these stock markets, then you may not find these forex charts too difficult to understand.
The currency variations of a particular nation also depend on the political and financial conditions of the country at that point in time. Any sudden or unexpected event, such as an earthquake, political coup or epidemic, has traders rushing to their screens in a frenzy. It is therefore vitally important to track all the political news if you are into forex trading.
How to get started
Tracking these forex charts is a real challenge to any forex trader. It is important to have good quality software installed on your PC to find the variations in the charts. This allows you (the investor) to track your investments clearly and cleverly. So, proper study of the forex charts is one of the basic and most crucial parts of forex trading. Fundamental analysis and good study of forex charts will form a strong foundation for your forex trading career.
To control the market, forex traders need to have a very good knowledge of the forex charts. There are few tools available in the forex trading market which can help you track these charts. The success rate of forex traders depends heavily on understanding these charts, and their reaction time to the changes in this market. However, some automatic tools will control your trading without looking at this forex chart. These forex charts are still technically strong tools that will provide you with the trading data during the trading hours of the day.
What are forex charts?
These charts show the patterns and the current positions of currencies in the market. They show the currency format like this: JPY/USD. JPY represents the Japanese Yen and USD represents the United States Dollar. The forex chart shows how the two currencies compare, depending on the market situation. This chart gives you a review of the trading that happened during the course of the day. The Forex chart gives all the information from the opening range of trading, the trading in between, to the trading range by the end of the day.
You can also check the weekly, monthly and yearly status for the markets from these forex charts, too. A casual look at this chart tells you what happened in the forex trading market that day. You can adjust the timeframe at the bottom to monitor the current trends in a given day. There are 3 different types of forex charts available these days. They are the Line chart, the Point and figure chart, and the bar chart. You can learn about these forex charts in very short time if you can carefully follow your forex broker.
Where are they to be found?
The forex chart for a particular currency pair can be tracked even on the internet. Business news also provides an overview of the latest trends, often on television. Stock markets also use these types of charts. If you are well aware of these stock markets, then you may not find these forex charts too difficult to understand.
The currency variations of a particular nation also depend on the political and financial conditions of the country at that point in time. Any sudden or unexpected event, such as an earthquake, political coup or epidemic, has traders rushing to their screens in a frenzy. It is therefore vitally important to track all the political news if you are into forex trading.
How to get started
Tracking these forex charts is a real challenge to any forex trader. It is important to have good quality software installed on your PC to find the variations in the charts. This allows you (the investor) to track your investments clearly and cleverly. So, proper study of the forex charts is one of the basic and most crucial parts of forex trading. Fundamental analysis and good study of forex charts will form a strong foundation for your forex trading career.
Forex unit LiteForex keeps on enlarging the set of trading instruments
Forex unit LiteForex keeps on enlarging the set of trading instruments
A new marker ft.LotRuler has been included in the author's set of trading methods "Forextools".
The group of companies LiteForex gladly announces to its clients that the set of tools "Forextools" has been enriched with one more indicator - ft.LotRuler. Today LiteForex is the best platform for testing user's mechanical trading systems, experts and indicators. Operating the accounts is supported by many developers, Sergey Kravchuk, an author of "Forextools", is among them. We'd remind you that "Forextools" is a comprehensive tool set of equally complementary indicators, experts and scripts designed for working with Forex market with the use of the platform MetaTrader 4.
Since the beginning of 2010 Sergey Kravchuk has decided to pay special attention to the intraday trading instruments. Designing of the Intraday Eye indicator, advantages of which the users of the group of companies LiteForex have already appreciated in full measure, has become the first step in this direction. One more indicator - ft.LotRuler - is at traders' disposal now.
This indicator considerably simplifies calculation of doable profits and losses and makes it achievable to visually estimate and choose a corresponding lot size. Sergey Khravchuk says, that "such a tool saves greatly time and takes care of nerves of those traders, who work under tense intraday conditions". The use of this indicator also simplifies the observance of "Money management" rules which is a precondition for successful trading in Forex market.
One can get acquainted with a detailed description and some peculiarities of the use of a new indicator in the corresponding division of a new trader forum of the group of corporations LiteForex at http://forum.liteforex.org/showthread.php?t=296. The installer and the license archive for LiteForex demo accounts are accessible on the same URL address. The customers of the group of companies LiteForex can have the license for operating real accounts free of charge. Those traders who aren't clients of the group of companies LiteForex can buy this license on the developer's site at http://forextools.com.ua. The group of companies LiteForex plans to constantly enrich and improve the offered set of instruments "Forextools" in the near future.
A new marker ft.LotRuler has been included in the author's set of trading methods "Forextools".
The group of companies LiteForex gladly announces to its clients that the set of tools "Forextools" has been enriched with one more indicator - ft.LotRuler. Today LiteForex is the best platform for testing user's mechanical trading systems, experts and indicators. Operating the accounts is supported by many developers, Sergey Kravchuk, an author of "Forextools", is among them. We'd remind you that "Forextools" is a comprehensive tool set of equally complementary indicators, experts and scripts designed for working with Forex market with the use of the platform MetaTrader 4.
Since the beginning of 2010 Sergey Kravchuk has decided to pay special attention to the intraday trading instruments. Designing of the Intraday Eye indicator, advantages of which the users of the group of companies LiteForex have already appreciated in full measure, has become the first step in this direction. One more indicator - ft.LotRuler - is at traders' disposal now.
This indicator considerably simplifies calculation of doable profits and losses and makes it achievable to visually estimate and choose a corresponding lot size. Sergey Khravchuk says, that "such a tool saves greatly time and takes care of nerves of those traders, who work under tense intraday conditions". The use of this indicator also simplifies the observance of "Money management" rules which is a precondition for successful trading in Forex market.
One can get acquainted with a detailed description and some peculiarities of the use of a new indicator in the corresponding division of a new trader forum of the group of corporations LiteForex at http://forum.liteforex.org/showthread.php?t=296. The installer and the license archive for LiteForex demo accounts are accessible on the same URL address. The customers of the group of companies LiteForex can have the license for operating real accounts free of charge. Those traders who aren't clients of the group of companies LiteForex can buy this license on the developer's site at http://forextools.com.ua. The group of companies LiteForex plans to constantly enrich and improve the offered set of instruments "Forextools" in the near future.
วันพุธที่ 3 มีนาคม พ.ศ. 2553
How To Use Forex Robot Software To Scalp The Market
How To Use Forex Robot Software To Scalp The Market
Employing forex robot software to scalp the market can be an exceedingly worthwhile technique to trade the foreign exchange but it also carries a substantial amount risk. Some forex traders appear to make large amounts money this way although some go broke. So what is the difference and how can you stack the advantage when you're scalping forex by utilizing a forex trading robot?
1. Decide on your broker very carefully
It is very important obtain the right broker when you utilize forex robot software. Numerous brokers do not like scalping tactics and especially object to the fast earnings that can be made with an EA.
Usually the brokers might be market makers who will carry the risk of a trade themselves until they can match it in the ECN. If the forex trading robot moves in and out of the market rapidly, they will not have an opportunity to cover their risk, and so your gain will be their loss. Obviously, if you are very profitable they will quickly figure out that they do not want your business.
Brokers who do not take the other side of your positions are more likely to be content to consent to your forex robot software's scalping techniques. To acquire a responsive broker either question the developers of your forex trading robot or look for considerations from various other scalping traders in forex forums, or other online resources.
2. Regulate your risk
Several people new to forex trading expect that since scalping systems rely on several modest trades, they are less risky than models relying on a increased profit per trade. This is not correct at all. Scalping is just as high-risk as any other type of foreign exchange trading. Risk management is significant if you do not want to be wiped out of the game}}.
For the identical factor it is significant not to over leverage your positions. Unquestionably, do not pick out a broker by simply searching for the one that offers you the highest leverage, unless of course you understand the drawdown of your process and that you can cover it.
The challenge with higher than average leverage implies that triggering a stop loss will signify a increased loss. Sure, the gains are higher too, but when you have a string of losing trades you can burn through your funds quite fast. It is important that your trading account can handle the losses. It is much more probable to be able to do that provided you have kept your risk and your leverage low.
3. Have an understanding of your Forex Robot Software
It is also critical to know precisely what your scalper forex trading robot is doing. This means having practical expectations concerning things like the number of times it will trade in a week, how much on average it will make on a successful trade, how much it will lose on an unsuccessful trade, what percentage of trades are profitable, etc.
All of this facilitates you to fully understand exactly what you can anticipate in terms of your bottom line in the long term and what will be the optimum level of risk. When it comes to risk, incidentally, always assume that the worst case scenario is at least two times as bad as the worst patch that you have seen.
An individual cannot rely on information from the developers of forex robot software or from other users in this aspect. This is not a matter of trust, it is just that several variables will apply to each individual. So do your own back testing and use a demo account before you start to use a scalper forex trading robot live.
Employing forex robot software to scalp the market can be an exceedingly worthwhile technique to trade the foreign exchange but it also carries a substantial amount risk. Some forex traders appear to make large amounts money this way although some go broke. So what is the difference and how can you stack the advantage when you're scalping forex by utilizing a forex trading robot?
1. Decide on your broker very carefully
It is very important obtain the right broker when you utilize forex robot software. Numerous brokers do not like scalping tactics and especially object to the fast earnings that can be made with an EA.
Usually the brokers might be market makers who will carry the risk of a trade themselves until they can match it in the ECN. If the forex trading robot moves in and out of the market rapidly, they will not have an opportunity to cover their risk, and so your gain will be their loss. Obviously, if you are very profitable they will quickly figure out that they do not want your business.
Brokers who do not take the other side of your positions are more likely to be content to consent to your forex robot software's scalping techniques. To acquire a responsive broker either question the developers of your forex trading robot or look for considerations from various other scalping traders in forex forums, or other online resources.
2. Regulate your risk
Several people new to forex trading expect that since scalping systems rely on several modest trades, they are less risky than models relying on a increased profit per trade. This is not correct at all. Scalping is just as high-risk as any other type of foreign exchange trading. Risk management is significant if you do not want to be wiped out of the game}}.
For the identical factor it is significant not to over leverage your positions. Unquestionably, do not pick out a broker by simply searching for the one that offers you the highest leverage, unless of course you understand the drawdown of your process and that you can cover it.
The challenge with higher than average leverage implies that triggering a stop loss will signify a increased loss. Sure, the gains are higher too, but when you have a string of losing trades you can burn through your funds quite fast. It is important that your trading account can handle the losses. It is much more probable to be able to do that provided you have kept your risk and your leverage low.
3. Have an understanding of your Forex Robot Software
It is also critical to know precisely what your scalper forex trading robot is doing. This means having practical expectations concerning things like the number of times it will trade in a week, how much on average it will make on a successful trade, how much it will lose on an unsuccessful trade, what percentage of trades are profitable, etc.
All of this facilitates you to fully understand exactly what you can anticipate in terms of your bottom line in the long term and what will be the optimum level of risk. When it comes to risk, incidentally, always assume that the worst case scenario is at least two times as bad as the worst patch that you have seen.
An individual cannot rely on information from the developers of forex robot software or from other users in this aspect. This is not a matter of trust, it is just that several variables will apply to each individual. So do your own back testing and use a demo account before you start to use a scalper forex trading robot live.
The Secret Forex Code Review
The Secret Forex Code Review
The Secret foreign exchange Code is the most recent released automated currency exchange trading program. Even though it is new it's been examined by many foreign exchange trader expert for so many years now prior to the system has been made public to the public. And because it has been tested ans perfected we will ensure that this trading system truly work and actually spits gigantic profits. If you're merely a amateur trader or simply an ordinary trader who find it tough to earn money then this fully automated foreign exchange trading system will be an excellent choice. Let commence with our review.
what is the Secret forex Code? As I was telling you some time gone it is an automatic currency exchange trading system . And because it was automated you do not have to do lots of works that often involves on forex trading. You don't have to worry because you don't know ways to trade because it will provide you all the data wanted to start profiting from the biggest market if the planet. No concealed methods about foreign exchange trading doesn't revealed here.
Who made the Secret forex Code? This system was disclosed by a forex trader named Alex Wilson. He is now earning great revenue using this fully automated trading program. Like the various sales page that you will found online , this trading system was full of earnings evidence, but this proof wasn't false claims, it was all true. This system break the idea that to good to be true is really wrong. This system cross it's boundary giving trader a giant opportunity to make massive earnings. It has been tested, perfected and automated not just to help newbs but to help folks trader who already trading the market but eventually failed to make enough profits.
What you may going to get with The Secret forex Code? This automated currency trading system will supply you two 100 percent mechanical trading system that you haven't seen before. A completely automated system or set and forget system that actually wants 10 mins of your time each day. ; you simply set the system for 10 mins and then go to what you are plan doing and make sure that you can still make money even when you are not at home or in front of your PC. This system only knew one thing and that is to automate your trading and augment your trading profits. The system will give you an amazing trading programme that precisely make murdering winning trades and straight away create your place into the numbers of currency exchange successful trader.
What I like about The Secret foreign exchange Code is that it requires no thinking. You really do not have to choose for particular things as it actually show you the proper things to do and all you have got to do is set it up. No feelings involve because I personally think that it is critical that you should not trade base on your feelings. I found the system truly helpful and unique in a way that it was offering not only one but two absolutely automated foreign exchange trading system for the cost of one. You can truly save cash here, you do not have to spend lots of your hard-earned money on costly convention. You can stop yourself from too much spending without having started yet or profit yet. With the system you won't just save money but you may also save time monitoring your trade. And it works on any metatrader platform.
if you are asking if there are some things I don't like about The Secret forex Code, ; well I found it hard to believe that there is essentially no point for not liking and needing the system. Who do not need it? They're offering something that is a revolutionary, tested, proved and automatic system and what's best is that you can try it risk free! If you are not satisfied you can get a refund.
The Secret foreign exchange Code is the most recent released automated currency exchange trading program. Even though it is new it's been examined by many foreign exchange trader expert for so many years now prior to the system has been made public to the public. And because it has been tested ans perfected we will ensure that this trading system truly work and actually spits gigantic profits. If you're merely a amateur trader or simply an ordinary trader who find it tough to earn money then this fully automated foreign exchange trading system will be an excellent choice. Let commence with our review.
what is the Secret forex Code? As I was telling you some time gone it is an automatic currency exchange trading system . And because it was automated you do not have to do lots of works that often involves on forex trading. You don't have to worry because you don't know ways to trade because it will provide you all the data wanted to start profiting from the biggest market if the planet. No concealed methods about foreign exchange trading doesn't revealed here.
Who made the Secret forex Code? This system was disclosed by a forex trader named Alex Wilson. He is now earning great revenue using this fully automated trading program. Like the various sales page that you will found online , this trading system was full of earnings evidence, but this proof wasn't false claims, it was all true. This system break the idea that to good to be true is really wrong. This system cross it's boundary giving trader a giant opportunity to make massive earnings. It has been tested, perfected and automated not just to help newbs but to help folks trader who already trading the market but eventually failed to make enough profits.
What you may going to get with The Secret forex Code? This automated currency trading system will supply you two 100 percent mechanical trading system that you haven't seen before. A completely automated system or set and forget system that actually wants 10 mins of your time each day. ; you simply set the system for 10 mins and then go to what you are plan doing and make sure that you can still make money even when you are not at home or in front of your PC. This system only knew one thing and that is to automate your trading and augment your trading profits. The system will give you an amazing trading programme that precisely make murdering winning trades and straight away create your place into the numbers of currency exchange successful trader.
What I like about The Secret foreign exchange Code is that it requires no thinking. You really do not have to choose for particular things as it actually show you the proper things to do and all you have got to do is set it up. No feelings involve because I personally think that it is critical that you should not trade base on your feelings. I found the system truly helpful and unique in a way that it was offering not only one but two absolutely automated foreign exchange trading system for the cost of one. You can truly save cash here, you do not have to spend lots of your hard-earned money on costly convention. You can stop yourself from too much spending without having started yet or profit yet. With the system you won't just save money but you may also save time monitoring your trade. And it works on any metatrader platform.
if you are asking if there are some things I don't like about The Secret forex Code, ; well I found it hard to believe that there is essentially no point for not liking and needing the system. Who do not need it? They're offering something that is a revolutionary, tested, proved and automatic system and what's best is that you can try it risk free! If you are not satisfied you can get a refund.
Exploring Forex Software
Exploring Forex Software
The world of forex trading remains one of the most dynamic in all of the world financial markets. Every single day, more and more people are becoming attracting to plying their wares as a forex trader. The reason for this is somewhat self-evident: some people have made millions in the forex market. As a result, many novices have become inspired to venture into the world of forex trading. However, it is certainly not easy to succeed in forex. That is why it is so vital to procure the best available forex software for your own individual needs.
The currency market is extremely vast. That means those looking to succeed in forex will need to be able to scan the market for ticks that would make a forex trade viable. This may seem like a fairly simple concept on the surface. However, the ability to scan every market in the world 24 hours a day, Monday through Friday would not be the most feasible option for most people. That is why they need a little help and support and a quality forex software program would definitely help in this regard.
Of course, the operative word here is quality. You do not want to purchase a less than helpful forex program that will not deliver on the results that are intended. After all, what would be the purpose of purchasing such a forex software program? More than likely, a weak program would do little more than put you in a position to potentially lose money. Obviously, that is not an optimal scenario to be in.
This is not to say there is any perfect forex software program on the market that can any guarantees on any trades. Such illusions are just unrealistic. However, there are excellent systems out there that can most definitely improve your chances of making proper trades by sending the right signals and providing the right research. Investing in such a high quality forex software program would definitely be a plus.
Then, there are forex software programs that can perform automatic trades. As the name implies, these would be trades that have been preprogrammed into the system for the express purpose of making trades when you are not there to monitor the system. While this type of trading is not for everyone, some find it enormously helpful. As such, considering the option is at least advised. It may prove to be the wisest decision you make since it could keep you operating on the forex market without any pauses.
It is advised, however, to stick with those forex software programs that have been positively reviewed. There are a number of resources on the internet that keep track of the various forex software programs that have been released. Looking into what these reviews services have to say prior to making a purchase might be a wise move.
Ultimately, if you are going to enter into the world of forex trading, you will want a solid software program in which to perform your trades with. This will increase the odds that you succeed with your venture and make the most profitable trades possible.
The world of forex trading remains one of the most dynamic in all of the world financial markets. Every single day, more and more people are becoming attracting to plying their wares as a forex trader. The reason for this is somewhat self-evident: some people have made millions in the forex market. As a result, many novices have become inspired to venture into the world of forex trading. However, it is certainly not easy to succeed in forex. That is why it is so vital to procure the best available forex software for your own individual needs.
The currency market is extremely vast. That means those looking to succeed in forex will need to be able to scan the market for ticks that would make a forex trade viable. This may seem like a fairly simple concept on the surface. However, the ability to scan every market in the world 24 hours a day, Monday through Friday would not be the most feasible option for most people. That is why they need a little help and support and a quality forex software program would definitely help in this regard.
Of course, the operative word here is quality. You do not want to purchase a less than helpful forex program that will not deliver on the results that are intended. After all, what would be the purpose of purchasing such a forex software program? More than likely, a weak program would do little more than put you in a position to potentially lose money. Obviously, that is not an optimal scenario to be in.
This is not to say there is any perfect forex software program on the market that can any guarantees on any trades. Such illusions are just unrealistic. However, there are excellent systems out there that can most definitely improve your chances of making proper trades by sending the right signals and providing the right research. Investing in such a high quality forex software program would definitely be a plus.
Then, there are forex software programs that can perform automatic trades. As the name implies, these would be trades that have been preprogrammed into the system for the express purpose of making trades when you are not there to monitor the system. While this type of trading is not for everyone, some find it enormously helpful. As such, considering the option is at least advised. It may prove to be the wisest decision you make since it could keep you operating on the forex market without any pauses.
It is advised, however, to stick with those forex software programs that have been positively reviewed. There are a number of resources on the internet that keep track of the various forex software programs that have been released. Looking into what these reviews services have to say prior to making a purchase might be a wise move.
Ultimately, if you are going to enter into the world of forex trading, you will want a solid software program in which to perform your trades with. This will increase the odds that you succeed with your venture and make the most profitable trades possible.
วันศุกร์ที่ 12 กุมภาพันธ์ พ.ศ. 2553
Forex Trends And Coutner Trends
Forex Trends And Coutner Trends
Often traders discuss the individual psychology of forex traders but what are the factors that determine a trend in the market? How does the collective effect the this market psychology as a whole?
In every market there are conflicting positions between buyers and sellers. It is precisely these conflicting views that define market trends. Since all generally have access to the same information, which makes the difference is the position we take each other, the majority herd mentality defines the trend and when it is about to end.
What are the factors that influence trends?
When viewing the forex market in the eyes of fundamental analysis it is important to remember that a whole host of factors can turn trends and influence market direction. Any unforeseen event whether economic or political can shake the markets and cause trend changes in an instant.
For example, a change of government in a country can reinforce or undermine confidence affecting the currency it represents. Certain measures taken by states or central banks or directly strengthening or depreciating its currency against others, leading to bullish or bearish trends according to the interpretation of traders as a whole.
All traders are following the flow of price and the reflection of that through indicators so there on certain expectations on traders as a whole on what is going to happen. The thing is in an instance the trend can change as everyone will experience the same emotions. This creates the herd. Also be aware at news event releases or sudden unexpected news as it can change the trend in an instance.
In times of high instability investors in this uncertainty become more risk adverse and prefer hard currency or gold. People are willing and able to take on greater risk in favor of higher returns during times of stability.
It is also important to pay attention to the behavior and policies of market makers" those with access to large amounts of foreign exchange (financial coalitions, hedge banks, governments). They are market makers that have the power to change the course of the latter at any time they feel that particular currency or economic situation could be in danger.
The forex market psychology may also be affected by potential events that have not yet occurred like 9/11 for example but normally driven by media hype, trends, market movements in a specific direction before anything happens. Finally, another factor contributing to the perceptions of traders are long-term trends where the herd mentality is most easily portrayed.
The forex market is much more unpredictable than ever before with more traders, liquidity and transactions taking place daily than ever before. The more information you have on your side, the more homework you put in paying attention to analysis of trends and factors that influence markets and traders the better your chance of profiting trading.
Often traders discuss the individual psychology of forex traders but what are the factors that determine a trend in the market? How does the collective effect the this market psychology as a whole?
In every market there are conflicting positions between buyers and sellers. It is precisely these conflicting views that define market trends. Since all generally have access to the same information, which makes the difference is the position we take each other, the majority herd mentality defines the trend and when it is about to end.
What are the factors that influence trends?
When viewing the forex market in the eyes of fundamental analysis it is important to remember that a whole host of factors can turn trends and influence market direction. Any unforeseen event whether economic or political can shake the markets and cause trend changes in an instant.
For example, a change of government in a country can reinforce or undermine confidence affecting the currency it represents. Certain measures taken by states or central banks or directly strengthening or depreciating its currency against others, leading to bullish or bearish trends according to the interpretation of traders as a whole.
All traders are following the flow of price and the reflection of that through indicators so there on certain expectations on traders as a whole on what is going to happen. The thing is in an instance the trend can change as everyone will experience the same emotions. This creates the herd. Also be aware at news event releases or sudden unexpected news as it can change the trend in an instance.
In times of high instability investors in this uncertainty become more risk adverse and prefer hard currency or gold. People are willing and able to take on greater risk in favor of higher returns during times of stability.
It is also important to pay attention to the behavior and policies of market makers" those with access to large amounts of foreign exchange (financial coalitions, hedge banks, governments). They are market makers that have the power to change the course of the latter at any time they feel that particular currency or economic situation could be in danger.
The forex market psychology may also be affected by potential events that have not yet occurred like 9/11 for example but normally driven by media hype, trends, market movements in a specific direction before anything happens. Finally, another factor contributing to the perceptions of traders are long-term trends where the herd mentality is most easily portrayed.
The forex market is much more unpredictable than ever before with more traders, liquidity and transactions taking place daily than ever before. The more information you have on your side, the more homework you put in paying attention to analysis of trends and factors that influence markets and traders the better your chance of profiting trading.
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