The Forex market is a global entity that embraces most of the economies of the world and which behavior reflects a number of factors that at the end determine the performance of the countries economies, and being more specific for our Forex purposes, the performance of their national currencies.
When trading Forex you will need to approach the markets with the highest amount of knowledge you can gather so you can understand what the currencies are doing and why the price goes up or down. The are two kind of analysis you can use for this purpose; one is Technical analysis and the other is Fundamental analysis.
Technical analysis is aimed to the study of charts and the behavior of prices from a more mathematical point of view. And it's from this kind of analysis that most indicators derive as Bollinger bands, Moving Averages, Fibonacci levels, etc.
But there is also the Fundamental analysis. This kind of approach is mainly based on the economic performance of a particular country and its currency. It's also based on political events, natural phenomena that affect a country's production capacity, etc. Also as factors that influences the value of a particular currency we could mention the acts of Congress regarding corporate tax structure, labor legislation reforms; of course the amount and direction of military spending, specially in times of global instability. Even the Supreme Court rulings on different issues can have an impact on the value of the currency in the international markets.
Without any doubt the Internal Revenue office will have also an important influence on the forex market with their rulings on corporate or personal tax , also the Commerce Department's forecasts, prices for agricultural products, etc. Almost all important events in a particular country will have an influence on its currency.
As a forex trader you should always have an eye on these events, at least the most important ones so you can have a reliable indication of what course will the forex market take and act accordingly always with the intention of having profitable trades.
By : Adrian Pablo - http://www.1-forex.com/
No comments:
Post a Comment