Jul-12-2009 By Forex Article
Forex fundamental analysis is the strategy of predicting movements of individual currency pairs in the forex market by analyzing the underlying economic factors. Think of forex fundamental analysis the same way you would if you were to do fundamental analysis on a company’s public stock. You gather up the information and try to piece together the puzzle on how profitable the company is going to be. In the stock market the process is fairly simple. The main thing to analyze is the companies annual and quarterly reports. From this you can deduct some key indicators of profitability. When it comes to forex trading things get more complex because of the scale of the economy.
As a nations currency is a reflection of that nations economic status there is a lot of information to digest and process in order to get the full picture. There are interest rates, GDP, Consumer Price Index, Retail Sales and many more. All of which are an area of study onto themselves and continue to prove difficult to predict even for economists in that particular field. Many traders therefore respond more to news and announcements from the major players in the economy. This is why you often see the market moving at its most violent, and profitable, around news sessions. In this article we will look at three major announcements that become forex fundamental indicators.
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Jun-25-2009 By Forex Article
The forex market is an investors heaven and hell at the same time. The same thing that make forex trading so exiting and profitable are the same that can break a trader faster than anywhere else. The one thing that sets the forex market apart from other financial markets is the significant volatility of the market. Currency is used everyday and everywhere, where people do businesses and there are so many players with conflicting interest that no one holds any true edge over others.
Central Banks around the world are of course the major institutions in the market trough their huge influence by setting interest rates. Central Banks don’t act on feelings or sentiments though, their objective is to stabilize the growth of their nations through monetary policy. So if you can actually predict a countries economic growth there is a good chance you can predict the interest rate changes from the central banks. Let us take a look at why economic growth is important to predicting interest rates.
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Jun-12-2009 By Forex Blog
In this article we will look at one of the single most important indicators used in fundamental analysis by Forex Traders: Interest Rates. Interest rates set by the eight major central banks of the world are the single biggest influence on currency rates on the Forex markets. These changes in interest rates are an indirect response to other factor changes in the economy and carry the potential to have significant impacts on the market immediately and with powerful force.
Surprise changes in interest rates is often what causes the biggest change in the market, which is why traders spend much of their time trying to predict what rates the central banks will set in the future. That is what we will look at in this article: How to predict changes in interest rates and what effect they have on the Forex market.
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May-14-2009 By Forex Blog
In order to successfully create a forex trading strategy all profitable traders will use some sort of either technical or fundamental analysis. Many traders choose to go with technical analysis as their main tool because it, all else being equal, is easier to implement than fundamental analysis. With the software available much of the hard work is done and you really don’t need to have a solid understanding of advanced math to use these strategies. Other traders choose instead to go with fundamental analysis. Fundamental analysis can seem a bit overwhelming at first because it involves so many factors.
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May-14-2009 By Forex Blog
In the world of Forex trading there is much to learn about currency exchange. In the world of Islamic Forex Trading, there are a lot more things to be considered than just the exchange of currency or precious metals. Until recently Forex trading was not being done in the Islamic world. This was mainly due to the fact that “Shariah Law” forbids many of the Forex standards.
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Mar-18-2009 By Forex Article
The Chaikin Money Flow indicator, developed by Mark Chaikin, was an improved version of his previous discovered indicator ‘Accumulation / Distribution’. Given this fact, Chaikin Money Flow indicator is much similar to its kin ‘Accumulation / Distribution’. Still it differs from the latter as it does not taken in consideration the opening price, but the mean currency price. The word money flow suggests that the calculation of a key value is based on the price & volume. Indexing these calculated key values depicts money flow. Traders using Accumulation / Distribution indicator may not have easy access to the opening prices. They may use CMF (Chaikin Money Flow), which is known as the “oscillating indicator”.
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Mar-15-2009 By Forex Article
On-Balance Volume is a popular volume based technical indicator developed by Joseph Granville in 1963. This indicator lies onus on tracking the momentum by correlating the volume of the trades to the change in price of the underlying currency / stock. This indicator aims to look out for trends where higher number of buyers / sellers form a bullish / bearish scenario respectively. The underlying assumption for this indicator is that volume overtakes the price movements. Many traders prefer OBV, as it is a running indicator. It adds the volumes to identify the cash inflows & outflows. OBV is mainly used to compare the volumes with the currency prices, thus identifying any diverging signal or confirmation.
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Mar-13-2009 By Forex Blog
With the increasing timely improvements in Forex technical analysis tools, the year 1978 saw a new oscillating indicator “Relative Strength Index (RSI)” introduced by J. Welles Wilder. The Relative Strength Index (RSI) is a very famous momentum indicator. This indicator is often confused with other common names “Relative Strength” rankings or “Relative Strength” charts. Unlike other types of “Relative Strength” indicators, the RSI uses one currency for calculating the value.
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Mar-11-2009 By Forex Blog
One of the most simple and popular technical analysis indicators is the moving averages method. This method is known for its flexibility and user-friendliness. This method calculates the average price of the currency or stock over a period of time. The term “moving average” means that the average moves or follows a certain trend. The aim of this tool is to indicate to the trader if there is a beginning of any new trend or if there is a signal of end to the old trend. Traders use this method, as it is relatively easy to understand the direction of the trends with the help of moving averages.
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