Successful Forex investments could be what allows many to achieve the dream of working from home. The keyword of course is ‘successful.’ Unfortunately, thousands if not millions of Forex traders all of the world quit Forex trading before even working at it for a full year because they kept losing their money.
Yet, while these people refuse to have anything to do with Forex, there are thousands of others that are becoming wealthy through it. What separates those who are doing well from those that aren’t? The answer involves knowing how to best implement Forex strategies. This article will discuss the two basic Forex strategies used with Forex investing: technical analysis and fundamental analysis.
Technical analysis is the most popular Forex strategy used by Forex investors. With a technical analysis Forex strategy, investors evaluate current price trends associated with the currencies they are working with. To help determine these price trends, investors using this type of Forex strategy have several studies to choose from. These include the Elliott Waves, Fibonacci studies, Parabolic SAR and pivot points. Of these studies the Fibonacci and the Eliott Waves are the most popular for investors using the technical analysis Forex strategy.
Fundamental analysis is a Forex strategy in which a person evaluates economic trends of the country associated with their selected currency. With this type of Forex strategy, investors pay a lot of attention on what is happening in a country. They do this by keeping up with that country’s news, whether they look at it on television or research it online. Some of the things they are interested in include: consumer price index, retail sales and purchasing managers index.
Can one use a combination of technical analysis and fundamental analysis as Forex strategies? The answer is yes. In fact, many Forex professionals recommend an investor do this. By using a combination approach, an investor can get a more well-rounded picture of how well a particular currency is going to perform. It might take a lot more time, since a person is going to have to do different research for each of the different strategies, but it will be worth it in the long run.
When a person has decided what type of Forex strategy they are going to use, they need to put it to the test by trading in a demo account. A demo account is one in which a person does not work with real money. Many demo accounts charge for use, but there are a few that can be used for free. How one performs in a demo account can give them a good idea of how they would perform if the money they were working with actually came from their pockets.
In conclusion, the two most popular Forex strategies are technical analysis and fundamental analysis. They can used by themselves or together for Forex trading. If a person uses them together, they maximize their profit potential. Either way, they just need to remember to not do anything until they have had sufficient experience with a Forex demo account.