Money flow is an essential part of the economic environment, and it is the most valuable resource out there because it's always scarce and because it is easily convertible into other things. Forex trading, then, plays an vital role to the global economy. As a result, billions - or even trillions - of dollars are traded in the currency markets every single day. If you are a forex investor, whether brand new to this level of advanced investing or an "old pro", here are 5 tips that you'll want to keep in mind while trading.
1. Crucial analysis. Accurate forex forecasting can only come from a combination of fundamental analysis and technical analysis. Fundamental analysis looks at big picture events and underlying conditions while technical analysis examines trends through the lens of historical pricing. You cannot give up one and hope the other will fill in. There are excellent third party services where you pay for a membership to get advice from seasoned experts paying attention to all aspects of the market, leaving no stone left unturned in a search for clues to winning trades.
2. Fact versus gossip. Smart investors will respond to both. On the one hand, you can look at the facts and make a conclusion based on what you see in the trends. On the other hand, you listen to the rumors and act with discrimination by doing the opposite. If taking advantage of a forex expert's club, round table or a reputable online forex membership site, the experts are aware of both fact and rumor and can help participants determine which is which and what to do next.
3. Domino effect. Forget trading based on an "A" leads to "B" approach. That only puts you in step with the market. Successful investors trade based on an "A" leads to "B" leads to "C" approach. When "A" happens, they act as if "C" is about to happen even though "B" hasn't yet happened. That's for the reason that they know that "B" will happen and then "C" will happen. This puts them ahead of the market. For example, a distant country whose currency isn't popularly traded goes through a growth spurt. Novice investors don't notice. Smart investors who understand the domino effect know that this distant country is an important trading partner with a country that has a popularly traded currency. Huge exports can drive up the economy of the popular-currency country and that will have an impact on the currency. So advanced traders will react accordingly when they hear about the distant country because they know that the popular-currency country will feel the impact.
4. Know the risks. Some people say that forex is a risky investment, or even speculation. Quite the contrary! If you know the risks and trade correctly, and make sure that every trade you make is based on sound analysis, you'll minimize the risks. These risks include political risk and economic risk and inflationary risk.
5. The environment. The most-ignored risk in forex trading is the environment. That's because we think of a light rain or frost as "the weather". But there are severe weather systems, including hurricanes, cyclones, tsunamis, droughts, floods, and the list goes on and on. Each of these can have a huge impact on the currency of the country because they have a huge impact on many industries. When industries are eliminated or devastated by extreme weather, currencies are impacted. So keep an eye on the weather when you're trading!
While some of this may be totally new to novice investors, experienced traders will have been nodding vigorously through the list. This is why I am a fan of the power of the internet, the fact that I can get real unbiased expert advice right on my computer without even leaving my desk. Yes - those so called guru programs can be extremely powerful - it puts experts who know this stuff at the beck and call of novice investors who need to know, especially with their twice-daily reports of the market - every novice can quickly gain from the experience of others. But I have to stress that you do not go for the the first one you find, there are experts and then there are "experts". Do your DD and be sure to chose a reputable veteran trader who before taking anyone's forex trading advice.
Forex in general, making money and Forex Brotherhood in particular is what Markus Wahlgren talks about on his blog, including reviews and opinions about Forex systems and robots for anyone wishing to learn about easy and sustainable money making. |
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