Forex Market Trends - The Secret To Making Big Money With Forex Trading
Forex market trends mean prolonged movement of the market in one specific direction, whether it is up or down. Different types of traders trade in different time frames. For a day trader a long term trend might last for a few hours. A medium term swing trader would consider a trend to be a price movement that lasts a week or two, while a long term trader look at price movements over a period of months or years.
Fact is, when you do day trading you make or lose money in the course of one day. If there is any question of a "trend", then it would be a trend that perhaps lasts a few hours. You have to make quick decisions, move in and out of markets in a split second. If you take into account trading commissions, this market is best left to experts. Strangely enough, the excitement of day trading often appeals to beginners, who proceed to lose their fortunes very quickly.
Another type of trader is the so called swing trader. Swing traders do not trade as often as day traders. They wait for a medium term trend in the market, and then either go long or short on a particular currency. They will stay in the trade for as long as the trend lasts, and try to get out just before it reverses. This of course is more of an art than a science, since there is nobody that can actually predict when the market will turn around. External factors can cause it to turn around within a matter of hours.
The third category of trader is the long term trader. They are not really traders at all, but should actually be called investors. They would only buy a currency if underlying economic factors (fundamental factors) indicate that the currency is on a long term upward trend. If the reverse is true, they would sell it (or go short in trading lingo). They do use technical indicators from time to time, but then over a much longer time frame than either day traders or swing traders.
Swing traders often use both technical analysis and what is called 'fundamental analysis' to make buying or selling decisions. Fundamental analysis looks at all the underlying economic factors that influence the movement of a currency. One example is inflation. When inflation of one country is higher than that of another, the currency of the first country will depreciate to adjust for this - all other things being equal!
Long term traders prefer to call themselves investors, and most of the time they only look at fundamental factors to make buying or selling decisions. Banks and other investment houses do, however, often make use of basic technical indicators like the six month moving average of a currency.
Chart used by traders vary from the simple line chart, to candlesticks and bar charts. A line chart is basically just a line connecting today's closing price with that of the previous day and so forth. Bar charts show both the opening price and the closing price. The hugely popular candlestick charts display a lot more information: highest prices, lowest prices, as well as opening and closing prices.
Forex market trends is the subject of many debates, numerous studies, and a lot of conjecture. - 23159
Fact is, when you do day trading you make or lose money in the course of one day. If there is any question of a "trend", then it would be a trend that perhaps lasts a few hours. You have to make quick decisions, move in and out of markets in a split second. If you take into account trading commissions, this market is best left to experts. Strangely enough, the excitement of day trading often appeals to beginners, who proceed to lose their fortunes very quickly.
Another type of trader is the so called swing trader. Swing traders do not trade as often as day traders. They wait for a medium term trend in the market, and then either go long or short on a particular currency. They will stay in the trade for as long as the trend lasts, and try to get out just before it reverses. This of course is more of an art than a science, since there is nobody that can actually predict when the market will turn around. External factors can cause it to turn around within a matter of hours.
The third category of trader is the long term trader. They are not really traders at all, but should actually be called investors. They would only buy a currency if underlying economic factors (fundamental factors) indicate that the currency is on a long term upward trend. If the reverse is true, they would sell it (or go short in trading lingo). They do use technical indicators from time to time, but then over a much longer time frame than either day traders or swing traders.
Swing traders often use both technical analysis and what is called 'fundamental analysis' to make buying or selling decisions. Fundamental analysis looks at all the underlying economic factors that influence the movement of a currency. One example is inflation. When inflation of one country is higher than that of another, the currency of the first country will depreciate to adjust for this - all other things being equal!
Long term traders prefer to call themselves investors, and most of the time they only look at fundamental factors to make buying or selling decisions. Banks and other investment houses do, however, often make use of basic technical indicators like the six month moving average of a currency.
Chart used by traders vary from the simple line chart, to candlesticks and bar charts. A line chart is basically just a line connecting today's closing price with that of the previous day and so forth. Bar charts show both the opening price and the closing price. The hugely popular candlestick charts display a lot more information: highest prices, lowest prices, as well as opening and closing prices.
Forex market trends is the subject of many debates, numerous studies, and a lot of conjecture. - 23159
posted by X - Men @ 12:17 AM
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