Trading in Forex is not a cake walk. One must try to gain
good knowledge about the forex market before start investing and start trading.
One must try to learn the basics of the Forex trading which is inherited in
Technical analysis. The technical analysis is a field in which the charts of
price movements are plotted. The scale of the time axis in the charts is user
defined. For example a user can plot the chart of the price movements with 1
min graph, 5 min graph, 10 min graph, 12 day graph or 1 month graph. Thus based
on whether the trader is an intraday trader, short term trader or a long term
trader the time scale changes accordingly. In technical analysis the charts of
various indicators like RSI or moving averages are studied and plotted. The
crossover of one particular moving average with the other moving average gives
the signal for buying or selling. Thus if the rise in the price of Forex Signal
is anticipated a buy signal or a buy call is given. On the other hand if the
technical analysis suggests a fall in the price of the currency, a sell call is
suggested to the trader. The basic principle is to buy at a leser price and
sell at a higher price.
Besides the technical analysis the trader can also adopt
trend based trading or trading with the trends. In this case the trend of the
market is identified to be up trend or down trend. Then based on the type of
the trend a buy or sell call is initiated. Also it is always advised to trade
with the trend and not against the trend.
The news based trading is also very popular among many
traders as the news has a immediate and prominent impact over the price
movements. The trader can also take the advice of the advisory firms if he
doesn’t want to perform the analysis himself. Thus if the trader follows the
above mentioned instructions he can become a successful trader in the Forex
Market.
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