Defining Forex Trading Strategies
You should form your Forex trading strategies based on a balance of fundamental and technical analysis.
What is Technical Analysis?
Technical analysis is based on using indicators, price changes, averages and various other charting tools. Charts are basically graphs, with price indicated by Japanese candles, bars or lines. Indicators are based on moving averages, price differentials, and various other complicated mathematical equations primarily using past performance of price.
Learning to trade with technical analysis is the first step in making trading decisions and becoming a successful trader.
What is Fundamental Analysis?
Fundamental analysis is based on interpreting how news items and current events will affect price. Political statements by government officials, financial reports by the heads of treasuries like the Chairman of the Federal Reserve in America, military actions between nations and unexpected natural disasters like earthquakes and tsunami's hitting highly populated area's are just some of the things that can be used in "fundamental analysis".
Both types of analysis should be used in deciding on your trading strategies.