Essential Forex Basics for All Traders

Essential forex basics are simple tips that all traders find useful in live trading. As independent thinkers, traders rely on facts, not public poll opinions.

Essential Forex Basics for Serious Traders

The main essential forex basics are about understanding reality and avoiding major mistakes in trading. Some of these include tips on not trading on the news, and not relying on economic report release times for day trading. Forex charts illustrate this point very clearly, as it becomes apparent that news and economic reports are impossible to figure out. And they are not 50-50 binary outcomes as urban legend has it. The entire forex industry is too focused on these news, for all kinds of reasons. And as a result many analysts write such daily analysis reports. But actually trading live, in these circumstances, it’s nearly impossible. N the other hand, day to day traders, and especially those willing to hold overnight trades, end up making most of the profits. Another basic tips on the forex market, is that market charts tend to work on momentum more than anything else. And there is a casual lagging phase between price action and fundamentals, ultimately, as a result of this weird phenomenon, the market is not always right, as urban legend once again puts it. If the market was right all the time, it would know everything that is going on, all possible information, and there would be no volatility involved. But charts clearly show all this volatility, and how sharply markets move when they catch up with fundamentals.

Forex Basics for Traders Willing to Do Better than Average

Some forex basics focus on the concept of using market indicators on interrupted mode, rather than the usual expected continuous way. The belief is that momentum and the developing trend are your friend, only in the beginning. But as soon as the trend matures, you will have to question all the momentum you see in the market, and look for counter, kind of trend-fading trade opportunities. Most profit opportunity occurs at reversals, and not when following an established trend. Veteran traders use time zones and candlestick analysis methods, for identifying the most likely reversal points. Time zones help identify the actual time where the market is most likely to move. EURUSD for example will likely move most during the New York session. So a move that EURUSD makes during the Asian session will likely fail and reverse. Candlestick analysis can help enhance such trading strategies by looking at 30 minutes charts, where several days worth of trading can be seen in a single chart. The global forex converter mechanism has revealed some patterns, which can help enhance trading. These patterns include the formation of highs and lows, and the duration of breakouts. But they do not include any fundamental insights. Fundamentals are more complex, and region and time specific for each currency. Fundamentals are what determine the real support and resistance levels, in terms of price zones, not thin trendlines. And they do work very well for determining how high or how low a currency can go. While most traders focus too much on charts and on their forex calculator, their support and resistance findings will be wrong. Only fundamental analysis can offer insight beyond momentum and into the real pivotal price levels.