Understanding affecting Forex rates

Understanding affecting Forex rates

This article will explain some of the differences between Stuttgart and basics and explain a little about each type of trading. Excerpts from "Market Wizards" by best-selling book where Jack Schwager interviews Ed Seykota and Bruce Kovner.

Ed is a trend trader (using technical analysis) and also relies on hunches than 20 years experience. He definitely emphasizes its dependence on technical analysis. While reading this, I liken the "hunches', for to know the effect fundamentals can have on a market, although I could be wrong, they could be purely from reading the many lists as well. Here are the exact words "Fundamentals that you read about are typically useless as the market has already discounted, and I call them" funny-mentals. "However, if caught early, before others believe, then you may have valuable "surprise-a-mentals. '"

Ed says his priorities when trading in the long term trend, the current charts and picking a good place to buy or sell, in that order.

Bruce says he is technically excellent and very useful but does not mean that paying attention to the basics.

It is important to note that technical analysis is a very important way of understanding the history of market movements, and therefore useful to identify trends. It actually does not tell us where the currency is going, but historical data analysis. We then need to use our own intelligence to see what the activity of trading says about future trades.

Technical analysis can be compared to taking the temperature of the patient. To ignore it is ignorance, and it can tell whether the market is active, or cold and dormant.

It also takes the unusual behavior. Anything that creates a new chart pattern is something unusual. He also says: "Studying the charts is essential and alerts me to existing disequilibria and potential changes."

That's the basics that will help to show whether trading value increases or decreases.

Anything that makes the country tick, in terms of exchange rate. Consumption, government spending, consumer price index for employment, government policy, political issues and even an individual event can affect the market much.

In summary, the fundamentals will show the direction of the price, but not the exact price. The chart analysis or technical analysis is better for it, so together you can really increase your chances of coming out with some pips.

The reason technical analysis is so emphasized is that many traders use charts to trade at any time, you will be drawing the same line resistance and line of support. So if you can read the charts well, have an excellent chance of predicting the market movements. The best way to learn about the effect of fundamentals is to learn a piece of economic data at the same time. This will help better educated trades.