For a Newbie trader,
Forex trading is just the buying and selling of different currencies of the
world. It's looks very simple for everyone, but you must pay attention that in
order to become a successful investor, we need to be able to develop two
distinct sets of skills. They are commonly known as fundamental and
technical analysis. They are very different skill sets, yet they are
equally as important to learn if you truly want to understand what is going on
with your trading.
Fundamental
analysis in Forex is a
type of market analysis which involves studying of the economic
situation of countries to trade currencies more effectively.
It
gives information on how the big political and economical events
influence currency market. Figures and statements given in speeches by
important politicians and economists are known among the trades as
economical announcements that have great impact on currency market
moves. In particular, announcements related to United States economy and
politics are the primary to keep an eye on.
Economic calendar
is created by economists where they predict different economics figures
and values according to previous months. It contains next data:
DATE---TIME---CURRENCY---DATA RELEASED---ACTUAL---FORECAST---PREVIOUS
Economic news releases often evoke strong moves in the currency market, creating a lot of short-term trading opportunities for breakout traders.
However, not all news reports are tradable. Some of them may not have significant effect on the market while others do. So, before deciding on the trading the upcoming news traders may want to find our weather the news is worth trading or not. Traders can find about the significance of the news by looking at the economic calendars's special features, such as for example, marking all important news in red.
For more information about economic calendar of ICMBrokers please click the link: ICMBrokers Economic Calendar
Technical Analysis in Forex is a market analysis that charts can be used on an intraday (5 minutes, 15
minutes), hourly, daily, weekly or monthly basis. The chart you study depends
on how long you plan on holding a position. If you are trading short-term, you
may want to look at 5-minute or 15-minute charts. If you plan on holding a
position for a few days, you would likely look at an hourly, 4-hour or daily
chart. Weekly and monthly charts compress price movements to allow for much
longer-range trend analysis.
Line Chart
The most basic chart because it represents only the closing prices over a set period of time. The line is formed by connecting the closing prices over the time frame. Line charts do not provide visual information of the trading range for the individual points such as the high, low and opening prices.
However, the closing price is often considered to be the most important price in stock data compared to the high and low for the day and this is why the only value used in line charts.
However, the closing price is often considered to be the most important price in stock data compared to the high and low for the day and this is why the only value used in line charts.
Bar Chart
In a bar
chart price movement is reflected by a bar. The length of this bar is
determined by the high and low of a trading period (e.g. a day). Small
horizontal tics may be used to designate opening and closing prices for this
trading period.
Candlestick Chart
Candlestick Chart
A
Candlestick chart is visual, giving a nice picture of the profile of market
prices and making it easier to categorize market price patterns to a finer
degree. The body of the candle represents the difference between the open and
the close for a period. When the opening rate is higher than the closing rate
the candlestick is solid. When the closing rate exceeds the opening rate, the
candlestick hollow.
Charts are
one of the most fundamental aspects of technical analysis. It is important that
you clearly understand what is being shown on a chart and the information that
it provides.
Common
Indicators
Technical traders use many different indicators in combination with support and resistance to aid them in predicting the future direction of exchange rates. Again, learning how to interpret various forex technical indicators is a study unto itself and goes beyond the scope of this forex tutorial.
Technical traders use many different indicators in combination with support and resistance to aid them in predicting the future direction of exchange rates. Again, learning how to interpret various forex technical indicators is a study unto itself and goes beyond the scope of this forex tutorial.
A few indicators that we feel we should mention, due to their popularity, are: Bollinger Bands®, Fibonacci retracement, moving averages, moving average convergence divergence (MACD) and stochastics. These technical tools are rarely used by themselves to generate signals, but rather in conjunction with other indicators and chart patterns.
If you wish to learn more about this subject, we suggest you read our
technical analysis of ICMBrokers please click the link: ICMBrokers Technical Analysis
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