Learn to Day Trade Forex
by InvestingTips on Nov 25, 2013
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Learn to Day Trade Forex
If you are interested in making a profit from the volatility of foreign currency exchange rates you need to learn to day trade Forex. There are certainly long term trends in major and minor currency pairs but all in all there is more profit to be made when you learn to day trade Forex and profit from the ups and downs that occur in each and every trading day. Learn to day trade Forex and make money when the relative value of the US dollar changes versus the Euro, the British Pound, the Canadian dollar or the Swiss franc. As currency rates rise and fall traders watch fundamentals and carry out technical analysis in order to predict price change and profit thereby. If you would like to start to learn to day trade Forex start with what drives currency rates.
Fundamental Analysis of Forex Currencies
The value of one Forex currency versus another is determined by the market. The market watches trade figures, employment and unemployment numbers, balance of payment, inflation, trade policy, central bank policy, and more. Traders profit from knowing how these fundamentals will affect a currency such as the British Pound and the Yen. To learn Forex trading a trader needs to have a sense of how to evaluate these fundamentals that eventually drive Forex currency rates. The Forex market was developed to allow for payments in international trade. In international trade one currency is used to purchase another. Therefore, a trader focuses on the fundamentals of each country. Factors that affect all nations such as the price of oil or threat of regional conflicts affect various currency pairs differently. For example a rise in oil price will be more hurtful to Japan and the Yen than to the USA which is a major oil producer.
Technical Analysis of Forex Currencies
A Forex trader always needs to have a sense of what the fundamentals are and where they are going. But, profit in day trading currencies has more to do with technical analysis of market patterns. This is why trading Forex with candlesticks and other technical analysis tools is so popular. Technical patterns like those used in Japanese candlesticks are a snapshot of price action for the day, hour, or even minute. Technical traders can successfully anticipate reverses in market sentiment and make money with an appropriate trade.
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