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Forex Tutorial: The Basics Of Forex Analysis

Forex Tutorial: The Basics Of Forex Analysis

The Forex trading market is an around-the-clock cash market where the currencies of nations are bought and sold, typically via brokers. For example, you buy Euros, paying with U.S. Dollars, or you sell Canadian Dollars for Japanese Yen. Forex prices can change at any moment in response to real-time events, such as political unrest, crude oil prices, inflation, import and export prices, or industrial production.

Currency market players typically use “Forex analysis” as a tool in predicting currency price movements. Forex analysis itself is divided into two types: fundamental and technical. A fundamental analysis uses economic and political factors as a means of predicting currency movements. A technical analysis uses reliable historical data as a means of forecasting these movements. The purpose of this article is to discuss the basic principles of fundamental and technical analysis.

A fundamental analysis uses economic and political factors, such as housing starts, the unemployment rate, or inflation, as a means of predicting currency movements. Fundamental analysis is concerned with the reasons or causes for currency movements. Many Forex traders who rely on fundamental analysis plan their trading strategies around a number of key U.S. Government economic indicators. Some of these indicators are the Gross Domestic Product (GDP), Foreign Exchange Rates, Import and Export Prices, Industrial Production/Capacity Utilization, the Composite Index of Leading Indicators, Consumer Credit, the Consumer Price Index (CPI), Retail Sales, Housing Starts, the Employment Cost Index, and Consumer Confidence.

All of these Federal economic indicators have a marked effect on both the stock market and Forex. Some of these indicators are released weekly, while others are released monthly or quarterly. Their sources include the Federal Reserve Board, the U.S. Bureau of Labor Statistics, the U.S. Department of Agriculture, the U.S. Bureau of Economic Analysis (BEA), and the U.S. Census Bureau.

Forex traders must take other economic indicators into consideration as well. The world’s leading economies (for example, the United Kingdom, Japan, France, and Germany) also release their own economic indicators that will have an impact on the Forex market. For example, leading economic indicators in the United Kingdom include Housing Prices, Gross Domestic Product (GDP), Vehicles per 1,000 People, Telephones per 1,000 People, and the Percentage of People Employed in Agriculture.

A technical analysis uses historical data as a means of predicting currency movements. The technical analyst believes that history repeats itself over and over again. Technical analysis is not concerned with the reasons for currency movements (for example, interest rates or inflation). Instead, it believes that historical currency movements are a clear indication of future ones.

Investopedia states that “In a shopping mall, a fundamental analyst would go to each store, study the product that was being sold, and then decide whether to buy it or not. By contrast, a technical analyst would sit on a bench in the mall and watch people go into the stores. Disregarding the intrinsic value of the products in the store, his or her decision would be based on the patterns or activity of people going into each store.”

For example, during the back-to-school buying season, the technical analyst might observe that more people are going into clothing stores than into stores selling flowers. Likewise, the technical analyst might observe that more men are going into stores selling flowers on Valentine’s Day than into clothing stores.

Here is another example. Oil prices dramatically increase, thus creating inflation. Interest rates rise as a means of controlling inflation. One historical result of higher interest rates is less money to spend, thus slowing economic growth. Another historical result is increased foreign investment in the currency affected by the higher interest rates, thus strengthening it.

The technical analyst typically uses charts as a tool for predicting currency price movements. The three most popular kinds of charts are line charts, vertical bar charts, and candlestick charts.

Some Forex traders depend on fundamental analysis while others depend on technical analysis. However, many successful Forex traders use a combination of both strategies. However, the important point to remember here is that no one strategy or combination of strategies is 100% certain.

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FOREX Fundamental Analysis

FOREX Fundamental Analysis

Most FOREX traders rely on analysis to make plan their trading strategy. This article will discuss fundamental analysis. The other common form of analysis is technical analysis. After reading this article you should have a better understanding of fundamental analysis and how to use it as part of your FOREX strategy.

Political and economic changes are the basis of fundamental analysis. These can frequently affect currency prices. Traders that take advantage of fundamental analysis will gather their information from a variety of news sources. They are looking for information about unemployment forecasts, political ideologies, economic policies, inflation and growth rates.

Fundamental analysis will provide you with an overview of currency movements and a broad picture of the economic conditions. Most traders then will combine their fundamental analysis with technical analysis to plot actual entrance and exit points as well as confirming the information provided by their fundamental analysis.

Just like most markets the FOREX market is controlled by supply and demand. Many economic factors can affect the supply and demand but the two most critical ones are interest rates and the strength of the economy. The over all strength of the economy is affected by changes in the GDP, trade balances and the amount of foreign investment.

There are many economic indicators released by government and academic sources. These indicators are usually released on a monthly basis but will sometimes be released weekly. These are pretty reliable measures of economic health and are closely followed by all traders.

There are many indicators that are released but some of the most important and commonly followed are : interest rates, international trade, CPI, durable goods orders, PPI, PMI and retail orders.

Interest Rates – can cause a currency to either strengthen or weaken depending on the direction of movement. In some cases high interest rates will attract foreign money, however high interest rates will frequently cause stock market investors to sell of their portfolios. They do this believing that the higher cost of borrowing money will adversely affect many companies. If enough investors sell of their holdings in can cause a downturn in the market and negatively affect the economy.

Which of these two affects will take place depends on many complex factors, but there is usually an agreement among economic observers as to how the current change in interest rates will affect the general economy and the price of the currency.

International Trade – If there is a trade deficit (more items imported than exported) it is usually considered a negative indicator. When there is a trade deficit it means that more money is leaving the country to buy foreign goods than is entering the country and this can have a devaluing effect on the currency. Usually though trade imbalances are already factored into the market consideration. If a country normally operates with a trade deficit then there should not be an affect on the currency price. The currency price will normally only be effected by trade differences when the deficit is greater than the market expected.

The measurement of the cost of living (CPI) and the cost of producing goods (PPI) are a couple of other important indicators. You should also watch the GDP which measures the value of all the goods produced in a country and the M2 Money Supply which measures the total amount of currency for a country.

In the US alone there are 28 major indicators, these can have a strong effect on the financial market and should be closely watched. This information can be found many places on the internet and is provided by many brokers.

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Why Technical Analysis Works Well In The Forex Market

Why Technical Analysis Works Well In The Forex Market

If you are considering currency trading in the Forex market, or you are already involved in Forex currency trading, here’s a money-making lesson that we can borrow from investors who use technical analysis to help them make investment decisions in the stock market.

The goal of performing technical analysis when currency trading is to predict profitable currency pair movements by analyzing price trends. The principles of technical analysis in the equity markets are the same as those in the Forex currency trading markets. In fact, the only real difference between the two is that the Forex market is open 24 hours a day while the equity markets are not.

This means that certain analytics that take time periods in consideration will need to be adjusted for Forex currency trading. Other than that, any of these common forms of equity technical analysis methodologies can be used when currency trading:

Elliott Waves — Developed by Ralph Nelson Elliott, this methodology is based upon the theory that market performance can be predicted by studying wave patterns that develop over a period of time.

Fibonacci Studies — Developed by 12th century mathematician Leonardo Fibonacci, this methodology is based upon the theory that changes in trends can be predicted based upon prices interacting with lines based upon certain sequences of numbers.

Parabolic SAR — Developed by J. Wells Wilder, this methodology is based upon the examination of prices in comparison to “stop and reversal” (SAR) numbers that indicate entry and exit points for a trade.

Pivot Points — A mathematical formula used to determine when to exit a trade based upon the numerical average of the high, low and closing prices.

As I mentioned earlier in this article, the key difference between technical analysis in the equities market, and technical analysis in the Forex currency trading market, is the fact that it is possible to participate in Forex trading 24 hours a day, seven days a week. That key difference is also the primary reason that technical analysis works so well in currency trading.

In order for technical analysis techniques to deliver maximum results, there needs to be extended periods of time available for patterns to develop and repeat. Because the Forex market never closes, and currency pairs are traded around the clock, definable patterns develop more quickly and the technical analyst has a plethora of Forex currency trading data available to work with.

Because more data means more accurate forecasting results, technical analysts can see better results, in quicker time, when combining technical analysis and Forex currency trading.

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Online Investors Turn to Technical Analysis

Online Investors Turn to Technical Analysis

Technology has not only allowed investors to trade online, but has provided them with the tools needed to analyze stocks like the pros.

In fact, technical analysis has become more popular than ever over the last several years. Traders evaluate past price movements to help forecast a security’s future price.

Fundamental analysis, the alternative method of stock evaluation, relies on a stock’s intrinsic value and requires a broader understanding of industry conditions and how companies are managed.

But how do investors look at the data, and what exactly are the advantages of technical analysis?

RushTrade, like many other brokers, provides candlestick charting as a technical analysis tool for their traders. Candlestick charts have been used for hundreds of years and are derived from a Japanese version used to analyze the price of rice contracts.

Like a bar chart, the daily candlestick line shows the market’s open, high, low and close of a specific day, but also uses color and shading to help clarify the range between the open and close of that day’s trading.

A big difference between the common bar charts and the Japanese candlestick charts is the relationship between opening and closing prices. Bar charts place more emphasis on the progression of today’s closing price from yesterday’s close. Candlestick chartists are more interested in the relationship between the closing price and the opening price of the same trading day.

Technical analysis methods work from the assumption that the market is more psychological than logical. Thus, candle patterns are essentially reactions of traders at a particular time in the marketplace. People often react en masse to situations, and this allows candlestick chart analysis to work.

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Cruise stocks: a risk vs. reward analysis

Cruise stocks: a risk vs. reward analysis

Investors know that oil prices and terrorism, two things that really can’t be controlled, have a large influence on the stock market. Many investors avoid airline stocks for this reason. They can’t control one of their biggest expenses (fuel) and an act of terrorism can seriously damage the industry.

Why are cruise stocks any better? Rising fuel costs and Hurricane Katrina led to lower stock prices for companies like Carnival Corp. and Royal Caribbean Cruises Ltd. These two cruise lines account for about 75 percent of the cruise industry, worldwide.

When George Allen Smith IV, from Connecticut, vanished while on a Royal Caribbean cruise, the industry received a lot of negative publicity.

Certainly, there are many negatives for cruise stocks, but some investors are bullish. First, there is no direct indication that the vanishing honeymooner from Connecticut has hurt ticket prices. Valuations on these stocks also look good.

Carnival Corp. trades at 16 times estimated 2006 earnings; its historic range is 10 to 30 times earnings. Royal Caribbean trades at 14 times estimated 2006 earnings; its historic range is 5 to 24 times earnings. Growth potential is strong as only 4 percent of Americans have ever taken a cruise.

When considering cruise stocks, remember the risks. A sharp rise in fuel prices or another terrorist attack would likely have a negative impact on cruise stocks. In my opinion the risk outweighs the possible reward as I don’t expect cruise lines to significantly outperform the broader market.

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How Fundamental Analysis Increases Profits For Forex Traders

How Fundamental Analysis Increases Profits For Forex Traders

The Foreign Exchange or Forex Market is potentially more profitable and easier to trade than the stock market, yet few people take the time to learn about Forex trading principles.

The good news, whether you are experienced in Forex trading, or if you’re an equity trader looking at the Forex market for the first time, is that many of the techniques that are used when trading equities are equally as valuable when they are used in Forex trading. The principles of Fundamental analysis are a good example, so let’s take a closer look.

When you are trading in the equities market you use fundamental analysis techniques to determine the long-term value of a company and the likelihood that it will continue to generate returns that are in line with your investment goals.

When you are trading in the Forex market, you are attempting to predict long term currency trends utilizing basic financial data about the country pairs behind the currencies you are considering trading.

Many traders in the Forex market use Forex trading fundamental analysis techniques to predict long-term economic trends that will affect a currency pair and believe that it is not a technique that suits short-term Forex traders. However, the dedicated Forex trading professional who keeps up-to-date on the data used to predict these long-term trends can also easily become adept at spotting “mini-trends” that become obvious when the collected data is analyzed.

The use of fundamental analysis in Forex trading requires you to analyze economic indicators such as Inflation Rate, Unemployment Rate, Interest Rates, Gross National Product (GNP), Retail Sales, Consumer Price Index (CPI), Non-Farm Payroll, and the sales of Durable Goods.

While all of these indicators are readily available, fundamental analysis in the Forex market also requires you to be aware of each country’s political climate as well as world trends that could have a trickle-down effect such as changes in tourism to that particular region, trade embargos, threat of war, and the potential for economy-disrupting natural disasters to occur within the region.

While the process of performing technical analysis on a company is much easier than performing it on two separate countries, it is worth both the time as well as the effort to learn the techniques if you want to be “ahead of the pack” by being able to predict Forex market trends before most of the world’s Forex trading investors wake up to an opportunity that you spotted long ago.

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Cracks | Technical Analysis of Stock Market 12/01/14

In this technical analysis video of the stock market I review the market action today and then review AAPL, FB, YHOO and TWTR.
Video Rating: 5 / 5

In today’s video, Christopher Greene of AMTV reports Steve Forbes predicts a Great Depression II. Subscribe to AMTV: http://www.amtvmedia.com/ Facebook: http…
Video Rating: 4 / 5

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Bill Poulos Profits Run Analysis Unveils $500 Forex Trading Method “Backdoor” Forex Wealth Catalyst

NY, NY (PRWEB) March 10, 2013

Folks whom find Forex trading very alluring plus could go about investing randomly without knowledge of the traps plus dangers could frequently fall prey to significant financial losses. One expert Bill Poulos at Profitsrun.com aims at providing individuals maximum financial knowledge, individual training along with a range of Software systems for trade alert cause for generating their Forex trading risk-free plus utterly worthwhile.

The business Profits Run is run by founder Bill Poulos that is a professional Foreign Exchange trader in addition to stock trader that created Profit Runs Inc inside the year 2001 to aid the rest of the planet with his 35 years extended wisdom plus experience inside the financial markets. He is sometimes known because among the Forex knowledge industry’s top experts. The trading knowledge Bill Poulos imparts from his several treatments is especially realistic, graspable plus could boost earnings within the Markets inside a fairly brief span of time when used properly.

The newest information is the fact that Bill Poulos at Profits Run is running a 3 element movie series offering away trading techniques plus additional useful training information. Bill states, It’s the same system which thousands of individuals paid a real value of $ 500 for inside the pastIt’s been “battle-tested” over the previous 5 years plus is about 86% exact inside spotting “profit pockets” inside the greatest 8 Forex markets

Whats also beautiful is the fact that whenever all 3 Forex Wealth Catalyst techniques are combined there is a synergy to provide traders the edge they require to possibly pull income from the Forex markets about a part-time basis month following month over time.

Bill Poulos is really worried regarding the state of the international economy plus he believes details will receive a lot worse before they receive better. He equally believes which entrepreneurs plus company owners will result in the largest positive impact found on the planet. Learning the 3 Forex Wealth Catalysts by Mr. Poulos will provide traders the foundation to succeed inside the Forex markets.

For traders which like to download the 2-step “blueprint” plus observe the companion “how to” movie which reveals how to start utilizing it now then click here.

For those which wish To see Bill Poulos Profits Run reports or even more info then please see http://www.forextradingcoursereviews.com/review/review-items/bill-poulos-profits-run







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Bare Reef Launches a New Equity Analysis plus Market Research Application for Mac


(PRWEB) January 16, 2013

The launch of Market Analyst marks the beginning of the modern line of investment tools from Bare Reef. Drawing from consumer suggestions plus years of experience developing the cross-platform portfolio administration application Portfolio mobile, Bare Reef is creating added value for investors found on the Mac platform.

Market Analyst differentiates itself with key qualities not earlier found found on the Mac including customizable marketplace scanning plus side-by-side chart comparison. Users familiar with Portfolio mobile absolutely appreciate the variety of attributes plus unparalleled help for global online quotation sources. Market Analyst expands about these features with increased information inside the shape of more RSS information feeds.

Investors may discover value inside Market Analyst for a multitude of jobs ranging from swiftly checking quotes to analysis of technical patterns. By combining the force to find marketplace styles plus position entry points inside Market Analyst with all the performance monitoring features of Portfolio mobile, Mac consumers have a complete investing answer with drag plus drop integration.

Minimum Device Requirements:

Mac OS X 10.6

Pricing plus Availability:

Market Analyst is accessible worldwide only within the Apple App shop for $ 14.99 USD (or similar amount inside additional currencies).

Bare Reef LCC was founded inside 2006 by Greg Hoover to supply customer-driven applications for investors of all backgrounds. Bare Reef develops desktop applications, web-based services plus mobile apps for a range of platforms. Its flagship product, Portfolio mobile (earlier StockTrac), comprises a line of mobile plus desktop apps which boast an unparalleled feature set as well as the many sensitive help. For further info, review licenses, or to schedule interviews, please contact Bare Reef President Greg Hoover. Copyright (C) 2013 Bare Reef LLC. All Rights Reserved. Apple, the Apple logo, iPhone, iPod plus iPad are registered trademarks of Apple Inc. inside the U.S. plus /or different nations.

Greg Hoover

President

ghoover(at)barereef(dot)com







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IMCA Publication Offers In-Depth Behavioral Finance Analysis


Denver, CO (PRWEB) August 16, 2012

Supposed risk tolerant investors inside 2007 left equitiesand their advisorsin 2008 plus 2009, revealing shortcomings inside risk questionnaires, according to a latest publication by Investment Management Consultants Association� (IMCA�). The post by Carrie H. Pan, PhD, plus Meir Statman, PhD, inside the Journal of Investment Consulting, argues which typical risk questionnaires are deficient for five factors. The authors go about to present concerns which is utilized because the foundation for a fresh form of questionnaire which probes for propensities including overconfidence, regret, plus life-satisfaction.

Other articles inside the newest Journal of Investment Consulting, a semi-annual, peer-reviewed publication focused found on the requirements of investment advisors plus riches managers, include:


����Masters series interview, The Human Side of Decision Making, featuring an in-depth conversation with Daniel Kahneman, considered the most influential psychologists inside the planet. Kahnemans function with his long-time collaborator Amos Tversky helped lay the foundation for behavioral economics, plus he shares his understanding into the rationality of decision-making.
����Does the Stock Markets Equity Risk Premium Respond to Consumer Confidence or Is It the Other Way Around? Risk aversion amidst stock investors has moved to a forever high range inside the wake of 20072009 occasions, according to analysts plus financial industry experts. This analysis carefully examines the history of the U.S. stock marketplace risk premium, the relationship between risk premium plus customer self-confidence, plus additional factors.
����What Matters inside International Equity Diversification notes which advisors have renewed efforts to urge customers to strengthen allocations to global markets, though the occasions of 2008 continue to undercut the content. Research continues to affirm the pros of global diversification inside the extended runeven whenever the crisis is taken into account.

During this time of uncertainty plus volatility, learning how investors think plus what forces decisions is an increasingly significant topic, mentioned Margaret M. Towle, PhD, IMCAs treasurer plus Journal of Investment Consulting editor-in-chief. The newest Journal of Investment Consulting provides a detailed consider behavioral economics issues which could assist advisors guide their customers by any financial storm. IMCA members plus anybody whom provides financial guidance to customers may benefit from reading this publication.

Visit http://www.IMCA.org to acquire more information.

Established inside 1985, IMCA is a nonprofit pro organization plus credentialing company with over 8,700 individual members. IMCA members jointly manage over $ 1.6 trillion about behalf of 1.3 million customers, providing investment contacting plus riches administration services to individual plus institutional customers. Because 1988, IMCA has available the CIMA� certification, that earned accreditation by the American National Standards Institute (ANSI) inside April 2011, generating it the initial financial services credential inside the United States to satisfy global specifications (ISO 17024) for personnel certification. IMCAs Certified Private Wealth Advisor� (CPWA�) certification is suited for riches administration experts using high-net-worth customers. In 2011, IMCA conferences plus workshops hosted over 4,000 guests.

IMCA� plus Investment Management Consultants Association� are registered trademarks of Investment Management Consultants Association Inc. CIMA�, Certified Investment Management Analyst�, CIMC�, CPWA�, plus Certified Private Wealth Advisor� are registered certification marks of Investment Management Consultants Association Inc. Investment Management Consultants Association Inc. refuses to discriminate inside educational solutions or practices found on the basis of race, color, religion, gender, nationwide origin, age, impairment, or any alternative characteristic protected by law.







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