Tuesday, September 18, 2012

An overview of the investment strategies on Forex

Forex trading refers to an international, 24/7, the counter exchange market, where they buy currencies of different countries and sold. And are always traded in pairs on the money hypothesis bought up and sold in the fall. It is the largest liquid financial market, which makes it impossible for any one investor to influence exchange rates.
There are two types of investment strategies FOREX:

Technical Analysis
Fundamental analysis

Technical Analysis:

Essentially technical analysis by small and medium investors.
A technical analysis considers factors that influence on the market rather than factors that can affect it. And price takes into account all the factors that have influenced. Market realities are taken only born and figures into account factors such as fear, hope, ignores expectations or other changes. And therefore most often based on the analysis of these assumptions:

• Price reflects all actual market movements. This price includes any means known in the market, such as supply and demand for foreign exchange, and political factors, trade agreements, etc. They are not interested in what led to the change affects the actual changes instead . Work on the assumption that price can take one of three directions:

 upwardly
 landing
 Side

• from these market models that have been identified as significant. This means that the factors that are repetitive in nature or will achieve the desired results.

• History always repeats itself and human psychology changes very slowly over time. It is market movements are predictable.

Various technical indicators are as follows:

1. Relative Strength Index:

It takes into account the proportion of the rise and fall of the index and expressed in a range of zero to one hundred.

2.CHARTS:

Systems and include hills and slopes and curves that develop on planning over a period of time, and reflect major and minor changes in style. Some have planned the following configurations:

• TRIANGLE
• rectangle
• The head and shoulders
• UP DOWN twice
• saucers
• V

3.GAPS:

There is a gap area on the chart where no trading took place.

• UPGAP: formed when the lowest price on any given day is more than the highest price of the previous day.

• DOWNGAP: formed when the highest price for a given day is less than the lowest price of the previous day.

NUMBERS:

And used a number of different theories of technical analysis, such as:

• Fibonacci theory
• Gan

Stochastic oscillator:

This indicates overbought and / or if it is the cheapest. It uses a scale of zero to hundred percent.

Fundamental analysis:

This is where the present study, the political, economic and financial conditions in the country of the currency. The country's economic situation and the policy depends on many factors such as interest rates and unemployment level, exports and imports, per capita income, the proportion of people living above and below the poverty, inflation, and trade relations with other countries, tax policies etc..

Some studies of fundamental analysts and evaluation of all these factors before making a decision. Thus, it helps to make decisions long and make a profit in the short term by extra ordinary developments.

Some indicators that help to fundamental analysis include:

1. GDP:

It reflects the total market value of all goods and services produced in a country during a given year.

2. Retail sales:

This reflects total receipts of retail stores in each country.

3. Index of consumer prices:

It reflects the change in the price of consumer goods.

4. BUSINESS CYCLE:

It reflects the different stages of the company through which. These phases include:

• Expansion
• PEAK
• recession
• Depression

5. POLICY MONETRY:

It controls the money supply in the economy.

Commercial success is knowledge, time and understanding of the market. You can not win consistently in the forex market due to its volatile nature. Thus, a trader should try to consider the technical and fundamental strategies of forex trading and making decisions based on current expectations and market trends. Try to trade with money you can lose no remorse. Trade with logic and if you are not sure and leave to rest for a while.

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