http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
A Practical Approach to Trading Currencies
Sometimes in trying to make money trading currencies it is all too easy to put the cart before the horse. That is to say when looking for profitable approaches to trading currencies, we get involved in too many details and lose sight of the big picture. Whether we end up with a conservative approach or an aggressive approach, fundamental trading or trading based on technical analysis, a practical approach to trading currencies will more likely end up making money.
Practical: realistic, down-to-earth, sensible, levelheaded, pragmatic, rational, businesslike.
A Fundamental Approach
The first and most essential part of a practical approach to trading currencies is understanding Forex fundamentals. No matter how skilled a currency trader may be in reading market sentiment with technical analysis tools, a Forex trader who understands the fundamentals knows where the market is eventually going. Understanding Forex fundamentals is a twofold process. There are solid facts and figures that are essential for fundamental analysis in foreign currency trading. These are balance of payments, cash reserves or debt, and employment figures. Less tangible but equally important to understanding Forex fundamentals are national politics, trade policy, monetary policy, and central bank pronouncements and stated policy. What may seem to be a small change in national monetary policy may lead to substantial changes in so called solid factors such as balance of payments, employment, and national debt or currency reserves.
Understanding Market Sentiment and How Crazy It Can get!
2. Sometimes in trying to make
money trading currencies it is
all too easy to put the cart
before the horse.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
3. That is to say when looking for
profitable approaches to
trading currencies,
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
4. we get involved in too many
details and lose sight of the
big picture.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
5. Whether we end up with a
conservative approach or an
aggressive approach,
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
6. fundamental trading or
trading based on technical
analysis, a practical approach
to trading currencies will more
likely end up making money.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
9. The first and most essential
part of a practical approach to
trading currencies is
understanding Forex
fundamentals.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
10. No matter how skilled a
currency trader may be in
reading market sentiment
with technical analysis
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
11. tools, a Forex trader who
understands the fundamentals
knows where the market is
eventually going.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
12. Understanding Forex
fundamentals is a twofold
process.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
13. There are solid facts and
figures that are essential for
fundamental analysis in
foreign currency trading.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
14. These are balance of
payments, cash reserves or
debt, and employment
figures.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
15. Less tangible but equally
important to understanding
Forex fundamentals are
national politics,
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
16. trade policy, monetary policy,
and central bank
pronouncements and stated
policy.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
17. What may seem to be a small
change in national monetary
policy may lead to substantial
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
18. changes in so called solid
factors such as balance of
payments, employment, and
national debt or currency
reserves.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
19. Understanding Market
Sentiment and How Crazy It
Can get!
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
20. The famous baseball pitcher
was criticized for holding the
ball in his hand for a long time
before pitching it.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
21. His response was that the
batter could not hit the ball
when it was his, the pitcher’s,
hand.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
22. Likewise you will not lose
money if you don’t
understand the market and do
not trade.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
23. A practical approach to
trading currencies is to only
trade when you have a clear
understanding of
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
24. current market sentiment
along with a clear
understanding of where
fundamentals will eventually
take a currency pair.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
25. Technical Forex trading
succeeds when it takes
advantage of what are
typically short term market
efficiencies but it pays even
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
26. better when the market is
really excited or depressed
and prices are way out of
kilter.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
27. Although major currencies are
typically not as volatile as
minor currencies, they trade
in high volume and high
liquidity.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
28. These attributes are positives
for technical Forex trading.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
29. A trader can spot market
turnarounds when the overall
market seems confused.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
30. Using basic technical analysis
tools a trader of major Forex
currencies can make money
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
31. day in and day out by simply
following the sense of the
market and trading
accordingly.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
32. Knowing When to Trade and
When to Quit
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
33. If you are not using a lot of
trading capital, a practical
approach to trading currencies
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
34. may be to make riskier than
usual trades in search of
making huge profits.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
35. Aggressive Forex trading has
its place as does conservative
Forex trading.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
36. It is a practical approach to
trading currencies to limit the
amount of capital invested in
risky
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
37. trades and concentrate the
bulk of trading capital on
trades in the ninety percent
win category.
http://www.theforexnittygritty.com/forex/a-practical-approach-to-trading-currencies
