The ABCs of Learning Forex
You have to make a decision. If you want to learn forex, you are going to have choose how you want to analyze the markets. Your choices are between technical analysis and fundamental analysis.
There are certainly some traders who have a grasp of both technical and fundamental analysis, but for the most part, traders tend to pick one over the other.
However, there are still plenty of forex traders who decide not to choose either of the methods. This sounds completely irrational but most would rather trade from the gut than really study how to trade market properly, so you can enjoy long term success in it.
You may laugh, but there are many traders who dont really grasp just some of the basic fundamentals that come with news events. To give you an example, there are many traders who couldnt even tell you the significance of NFP numbers or unemployment numbers. Its sad but true.
You’ll find that many traders still don’t quite understand whether an increase or decrease in interest rates will make their currency rise or fall in value.
This really wouldnt be that bad if traders really took the time to learn about analyzing the market from a technical perspective. But, as you may have guessed, most dont do that either. To many traders, technical analysis means shoving a bunch of indicators on your charts and hoping that these indicators are giving them the correct information they need.
The honest truth is that the vast majority of indicators will not ever provide any kind of proper technical analysis. The big reason for this is because they are inherently lagging. If you want to know what has already happened, then they are pretty good. But if you want to know what will happen, it doesnt provide much help.
If you are really serious about learning to use technical analysis, then I strongly encourage you completely get rid of your indicators start learning about price action.
Filed under: Currency-Trading
