Learn Currency Trading - Using Fundamental Analysis for Profit

| Posted: 09-11-2007 | Comments: 0 | Views: 15 | Rating: (53)

(?)

Fundamentals move currency prices and this is obvious but if you try and trade the news you will lose it is incredibly difficult to trade news stories and win - but if you know how to use fundamental analysis in your trading correctly, you can make huge profits.

Let's start with a simple equation for market movement

Forex supply and demand fundamentals + Investor perception = price

Millions of trades see the facts but they all draw their own conclusions from what they see.

Humans are not logical, they are motivated by the emotions of greed and fear and guessing the impact of the fundamentals is the hard bit.

Consider this rather startling fact:

In the last 100 years the amount of winners in forex trading remains the same about 5% and 95% lose.

This is despite the fact that we have seen huge advances in forecasting, computers are more advanced today than the one that landed man on the moon and we can get the news instantly at the click of a mouse.

It hasn't helped why?

The answer is simple humans determine the price of what something should be. While prices tend to move in line with the long term fundamentals prices spike away from fair value as greed and fear take hold and volatility takes prices in the opposite direction of the fundamentals a lot of the time.

It's a fact that markets collapse when the fundamentals are most bullish and rally when they are most bearish - this is human psychology at work.

You can still use them to back up your analysis of the long term trends - but you should really use forex charts to look for price spikes away from fair value.

These are easy to see on a chart and then you can time your entry with your trading signal to take advantage of the spike.

It's a fact that throughout history, that strong price spikes are temporary and eventually prices fall back to fair value - ALL you need to do is spot them.

News can also be used to spot contrary trades - if bullish news fails to push a market higher and bearish news fails to push it lower, this is warning you of a price change.

Today, trying to guess the impact of each individual news story is impossible, as the news is discounted instantly and you have no chance of winning.

Forex charts take care of this for you.

All forex technical analysis does is assume that all the fundamentals that are known show up instantly in price action. The technician is only interested in letting the chart tell him where prices are going next, not the reason and the bonus is - the chart shows human psychology to.

If you want to use the news then go ahead - but always use charts to time your entry and look for news stories that don't have the affect most traders thought they would to generate contrary trading signals.

There's an old saying:

"If you can hold your head when everyone else is losing theirs you probably haven't heard the news"

In forex trading you have but you are looking at the news in a different way to the majority and know how to use it to make forex profits.

Rate this Article:

Current: 0 / 5 stars - 0 vote(s).

Article Tags: Forex Trading, Currency Trading, Forex Education, Learn Currency Trading, Fundamental Analysis

Article Source: http://www.articlesbase.com/currency-trading-articles/learn-currency-trading-using-fundamental-analysis-for-profit-255960.html

Print article

Send to friend

Publish this Article

Author feedback

About the Author:

NEW! FREE 2 x CRITICAL TRADER PDFS
LEARN HOW TO TRADE HUMAN PSYCHOLOGY THE RIGHT WAY

Grab your Free critical trader PDFS, and more FREE Forex Education visit our website at:
http://www.learncurrencytradingonline.com/index.html

Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free!

Article Comments

Add new Comment

Forex Education - Why you Should not Try and Predict Prices
By: Kelly Price | 25/01/2008 | Currency Trading

Forex Trading - These Traders Made $100 Million Quickly How?
By: Monica Hendrix | 07/02/2008 | Currency Trading

Forex Training - Tips for Success
By: Kelly Price | 16/01/2008 | Currency Trading

Forex Trading - Which is Best Fundamental or Technical Analysis?
By: Monica Hendrix | 29/07/2007 | Currency Trading

Learn Currency Trading - Anyone Can Learn to Win if They Understand This Key Fact
By: Kelly Price | 03/07/2008 | Currency Trading

Learn Currency Trading - How People With No Trading Experience Became Trading Legends in Just 14 Day
By: Kelly Price | 09/05/2008 | Currency Trading

Forex Trading - 3 Trading Opportunities for Profit Right Now
By: Sacha Tarkovsky | 03/05/2007 | Currency Trading

International Currency Trading - an Opportunity for Wealth for Wealth for All
By: Sonia Kristina | 23/06/2008 | Currency Trading

Got a Question? Ask.

Ask the community a question about this article:

Frequently Asked Questions

I am looking for a reliable indicator/s to signal ...
By: basilc | 23-02-2008
I am looking for a reliable indicator/s to signal entry and exit points in the forex market. Trades lasting for 1 to 10 days are what I am interested in - not intraday trading.

Does the method really works for intraday traders ...
By: chim | 26-10-2007
Does the method really works for intraday traders ? It seems like breakout strategy ?

Q&A Powered by:

Latest Currency Trading Articles

Forex Training - These Traders Learned Forex in 14 Days and Made Millions!
By: Kelly Price | 10/10/2008
Here we are going to look at forex training and a famous experiment when a group of traders with no experience were taught to trade in 14 days and then went onto make $100 million in profits. Let's see how they did it and what you can learn.

Forex Trading Tips - 4 Tips You Must Understand to Win at Forex
By: Kelly Price | 10/10/2008
Here are 4 Forex trading tips that if you understand them, can allow you to enter the elite 5% of winners who make big long term consistent profits. Anyone can learn currency trading and win but these 4 points need to understood - here they are...

Free Forex Trading System - the One Enclosed is Free But Does it Work?
By: Kelly Price | 10/10/2008
Yes it does and it's made countless millions, for savvy traders all over the world and beats most of the forex robots sold. In this article, we will show you how and why it works and why this free Forex trading, could bring you currency trading success.

Forex Trading to Success
By: Shawn Burgy | 10/10/2008
Forex Trading to Success: Learn the ins and outs of Forex Foreign Currency Trading. See the financial factors and how to use them to better trade in the Forex Market. Financial forecast's in the state's of the country's you are trading in have a big factor. Learn how to use these factors to your financial Forex Trading advantage.

Best Currency Trading System - Finding the Best for Profits
By: Sonia Kristina | 09/10/2008
Is there a single best currency trading system? The answer is no there are several, depending on your aims and risk tolerance. This article is all about finding the best ones and avoiding the bulk which lose money...

The Best Forex Education - Where to Find it
By: Sonia Kristina | 09/10/2008
The best forex education can mostly be found for free and here we will look at how to find the best and help you formulate a trading strategy for triple digit gains...

Trade Forex for a Living - Do You Have What it Takes to Succeed?
By: Samuel Leslie Berkovits | 09/10/2008
The fact is anyone has the potential to trade forex for a living not everyone will do what it takes to succeed. So what does it take to enter the group of traders who trade for a living? Let's find out...

Currency Options Trading - Offer Limited Risk and Unlimited Rewards How to Use Them Correctly
By: Samuel Leslie Berkovits | 09/10/2008
Currency options trading offers traders a great advantage I times of high volatility which is the staying power - so long as your option comes in the money, before expiry you make money regardless of where prices spike in the interim...

More from Kelly Price

Forex Training - These Traders Learned Forex in 14 Days and Made Millions!
By: Kelly Price | 10/10/2008 | Currency Trading
Here we are going to look at forex training and a famous experiment when a group of traders with no experience were taught to trade in 14 days and then went onto make $100 million in profits. Let's see how they did it and what you can learn.

Forex Trading Tips - 4 Tips You Must Understand to Win at Forex
By: Kelly Price | 10/10/2008 | Currency Trading
Here are 4 Forex trading tips that if you understand them, can allow you to enter the elite 5% of winners who make big long term consistent profits. Anyone can learn currency trading and win but these 4 points need to understood - here they are...

Free Forex Trading System - the One Enclosed is Free But Does it Work?
By: Kelly Price | 10/10/2008 | Currency Trading
Yes it does and it's made countless millions, for savvy traders all over the world and beats most of the forex robots sold. In this article, we will show you how and why it works and why this free Forex trading, could bring you currency trading success.

Vitamins and Erectile Dysfunction Which Vitamins and Minerals Should You Take?
By: Kelly Price | 06/10/2008 | Men's Health
Erectile dysfunction and vitamins are linked and by taking the right vitamins and minerals and other key nutrients, you can help repair your libido but which ones are best? Let's find out...

Forex Trading - the Reason Most Traders Can't Accept Big Profits and Bank to Soon
By: Kelly Price | 06/10/2008 | Currency Trading
It may seem odd but traders who get trend direction right, bank their trades to early for a marginal profit, when they could have had a huge one and the reason this happens is they make fatal mistakes that are routed in their mindset...

Forex Mistakes - Why Ego Problems Cause Most Traders to Fail
By: Kelly Price | 06/10/2008 | Currency Trading
One of the biggest forex mistakes you can make is letting your ego get involved in trading. While it is not seen as a major problem it is and causes the demise of most new traders. If you want to win, understand ego problems and how to combat them...

Erectile Dysfunction - Herbal Treatments That are Proven to Work
By: Kelly Price | 06/10/2008 | Men's Health
If you want to cure erectile dysfunction, there are herbal treatments that work and the reason they do is - you are what you eat! By feeding your body the right fuel, you can heal your body. Let's look at the best herbs to treat impotence.

Beat the Credit Crunch -a Simple Way to Make Make Money Fast for Everyone
By: Kelly Price | 06/10/2008 | Wealth Building
If you are worried about the financial crisis, then the simple home business enclosed can help you beat the credit crunch and earn a great second or even full time income and make money fast...

Article Categories

Article Marketing

Article Notepad

Stop Duplicate Content

Term Papers

Need Help?

Sign up for our email newsletter

Receive updates, enter your email below

Use of this web site constitutes acceptance of the Terms Of Use and Privacy Policy | User published content is licensed under a Creative Commons License.
Copyright © 2005-2008 Free Articles by ArticlesBase.com, All rights reserved. (0.19, 17)

Learn Currency Trading - Using Fundamental Analysis for Profit

Article Comments

Related Articles

Got a Question? Ask.

Latest Currency Trading Articles

More from Kelly Price

Need Help?

Site Links

Webmasters

Business Info

Sign up for our email newsletter