There are five main aspects of the trade on the Forex market. Every trader must know these aspects:
* Fundamental Forex analysis
* Technical Forex analysis
* Money management
* Psychology of the work on the Forex market
* Forex brokers
It is very important to study and understand these foundations of trading if you want to gt stable profit on the Forex market.
Fundamental Forex analysis
Fundamental analysis is the process of analysis of the market that is made on the base of “real” events and macroeconomic data of the trade currencies. Fundamental analysis uses not only on the Forex market, it can be a part of any financial planning. There are the basic terms of the fundamental Forex analysis: short-term rates of interest, meetings and decisions of the central banks, any macroeconomic news, global, industrious, economic, political and climate news. Fundamental analysis is the most natural method for forecasting movements of the Forex market. In the theory it is enough to work using fundamental analysis only, but on practice it is often used with technical analysis.
Technical Forex analysis.
Technical analysis is the process of analysis of the market, that is made relying only on numerical data of the market: quotations, charts, simple and complex indicators, the volume of demand and supply, previous data of the market etc. The main idea of technical analysis is the principle of functional dependence of future technical data of the market on the data got earlier. As like fundamental analysis technical analysis is self-sufficient in the theory and you can get success using technical analysis only. But on the practice traders usually use both methods of analysis.
Money management on the Forex market.
Even if you master all methods of analysis and can make clear forecasts of the Forex market, you will not earn much money without the right strategy of the money management. Money management on the Forex market (as on any other financial market) is a set of rules that you develop according to your own style of trade and size of your capital. Money management plays an important role in the process of getting profit and you shouldn’t forget about it.
Psychology of the work on the Forex market.
Every beginning trader knows that he/she must study the market analysis and money management in order to become a successful trader, but traders often do not understand the importance of the control about his/her own emotions. But this is a big mistake. Control of emotions in the trading is the search of balance between greed and care. Almost any of well known psychological methods can work for a Forex trader and help him/her to hold the chosen strategy. You will meet these problems if you start working on the Forex market:
* Over trading
* Absence of discipline
* Blind compliance with forecasts of other traders.
There are 2 options you can earn on currency exchange market.
Alternatively, you can hire experienced traders to manage your account and they will trade for you. Read more about forex investment.