| If you have traded in Forex before, or if you want | | | | To become an experienced Forex technical trader, |
| to, one of the things you are going to need to know | | | | you should learn your way around the Forex market |
| about is technical analysis. | | | | by using a "demo" account first. Most good Forex |
| There are two types of analysis you need to know | | | | brokers will allow you to open a demo account with |
| about when it comes to Forex trading. Fundamental | | | | no money; then, you "trade" in "demo" mode until |
| analysis is "big picture" analysis, whereby you take | | | | you've become very experienced in placing trades. |
| into account a country's social, economic and political | | | | Once you begin to win on trades with this type of |
| health to determine the stability of its currency. A | | | | "pretend" trading, you can begin to place real trades |
| country that is stable in these areas is going to have | | | | with real money so that you can make a profit. It's |
| a stronger currency, in general than a country that is | | | | very important, though, that you do demo trading |
| not stable in these areas, and therefore a stronger | | | | first. This gives you the opportunity to learn your |
| country is going to be a better bet when it comes to | | | | way around the market just as you would if you |
| Forex trading. | | | | were really trading, and it teaches you how to handle |
| What is technical analysis? | | | | both wins and losses on trades. |
| Technical analysis is a little bit different. With technical | | | | What being an experienced Forex technical trader |
| analysis, you analyze a particular currency's patterns | | | | can do for you |
| and trends over a specific period of time. For | | | | As an experienced Forex technical trader, you have |
| example, if a particular currency has been performing | | | | the opportunity to make trades based upon the |
| strongly in its recent history, it's probably going to | | | | patterns and trends you see (as well based upon |
| continue to do so. Similarly, if it's been doing poorly in | | | | your own gut reaction, once you become |
| its recent history, it's probably going to continue to | | | | experienced), instead of on an emotional basis. Why |
| do that too. You chart currencies' trends and | | | | is this important? Because if you make trades based |
| patterns, and make predictions as to how a particular | | | | upon an emotional basis instead of on what your |
| currency is going to continue to do against another. | | | | data tells you, you're going to lose on trades, and |
| You place trades with "currency pairs" based on this | | | | you may even lose your shirt. That's a simple fact. |
| information, in essence betting that one currency is | | | | Trading based upon what your charts and data tell |
| going to do better than another and therefore | | | | you, on the other hand, is simply smart. That means |
| "winning" on that trade. | | | | that you make decisions based upon data, not upon |
| Does Forex technical analysis really work? | | | | emotions. In practical terms, that means you may |
| Absolutely, Forex technical analysis works to produce | | | | get out of a trade that's still winning because your |
| winning trades; many successful traders encourage | | | | data tells you it's time, or your data may tell you to |
| taking a twofold approach by using both fundamental | | | | get out of a trade that you're losing on, even though |
| and technical analysis to determine which trades are | | | | your emotions would tell you to stay "in the trade" in |
| going to produce profits. | | | | the hopes that you could make back the money you |
| Becoming an experienced Forex technical trader | | | | have already lost. |