Technical analysis for forex trading is carried out by sophisticated software these days. However, one does need to understand the various metrics that are used and plotted in order to understand them. Technical analysis uses past data for currencies and currency pairs in order to predict the future course of action. This kind of analysis can help define trading ranges and key levels too.
Fundamental analysis is more basic in nature but it requires a keen understanding of economics, world politics and the manner in which each of these aspects affect the currencies of the markets. The manner in which some events affect one currency can be very different from the way in which another currency behaves. This is because the volatility and sensitivity of each currency is different.
Trading News in the Forex Markets Trading news in the forex markets is possible only when you have a keen understanding of fundamental analysis. This is not something that you can learn through a book or a trading course completely. While some amount of theory will help you understand the various factors that can affect currencies, you will still need to do a thorough study of the historical background of the currency and the currency pair you want to invest in. This is the only way in which you will be able to grasp relevant news and be able to decipher it in the right way. When you trade with news in the forex markets, you need to remember that the timing of the changes, the rate at which the news affect the currency and the extent to which it does will differ. The best way to asses this is to get a feel of the market expectation and look at the deviation from the expectation when the news or reports do come out. The higher the deviation, the quicker and sharper the movement of the forex currency will be.?This entry was posted recently . You can follow any responses to this entry through the RSS 2.0. You can
Source: http://www.stockkevin.com/2012/11/points-of-caution-when-trading-news-in.html
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