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Using News, Analysis and Forecasts

March 7, 2013 0 Comments

Market summaries are available daily from many sources. They show movements in major currencies and are open to be analyzed by everyone — expert and amateur traders alike. Traders can use these summaries for stop losses and trailing stops, or as guides for entry and exit points (based on the daily high/low). Forex traders can use these summaries on a day-to-day basis, or on a weekly basis. With the summaries, traders can select future potential trades that offer the most rewards.

There are two basic Forex forecast methods with which the market can be analyzed and from which predictions can be made. The two methods are technical analysis and fundamental analysis. Both are used to forecast the behavior of the Foreign Exchange market; both aim to predict a price or a movement. Technical analysis studies the effects of movements while fundamental analysis studies the cause of such movements. The most successful forecasts combine both approaches.

newsTechnical analysis uses historical data; it uses charts and past market movements in order to predict future ones. It is built on the principle that apparent facts, such as charts (charts are based on market actions involving prices) are best reflection of everything that could affect the market and that is known to it. From this it can be inferred that technical analysis is used to identify patterns of market behavior that have long been recognized as significant, and that such patterns produce the expected results as they repeat themselves on a regular basis. I.e. patterns that have been recognized in the past will repeat themselves; Historical data will become future data.

Individual speculators, trading funds, corporate hedgers, and institutions—all benefit form having access to forex data using an online trading system. With high/low currency predictions in both daily and weekly time frames and/or with prices of closing or opening times, predictions can be made and risks can be measured. Every trading system shows it all.

Fundamental analysis on the other hand forecasts future price movements based on other relevant factors such as, for example, economic, political, and environmental factors that will affect the basic supply and demand.

Technical analysis follows many markets and market instruments, whereas the fundamental analyst needs to know the ins-and-outs of a particular market. Any successful forecast needs to use both approaches into consideration. BUT, to predict the Forex market flawlessly is impossible. No system is immune to the market—sometimes it simply fluctuates in ways that are not predictable. Forecasting is always risky so whatever you do, make sure that you manage your funds in a wise way.

About the Author:

Providing technical reports and forex news each day on major currencies and economic data. covering the US Dollar, Euro, British Pound and more. Contact me if you would like your news published here. Free Forex News

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