Forex

According to the Central Bank Survey of the forex market conducted by the Bank for International Settlements, as at 2004, daily trading volume reached an all-time record high of $1.9 trillion, up 58% from 2001. Do you know that this humongous daily trading volume is about 20 times that of the New York Stock Exchange and the Nasdaq combined? With about 80 percent of foreign exchange transactions having a dollar leg, you don't have to worry about liquidity issues when trading any of the these big-economy currencies, which are namely, USD, GBP, Euro, CHF, JPY, CAD, AUD and NZD. However with stocks, futures, options or commodities, you tend to be restricted by their illiquidity especially during after-hours.

There are 2 types of analysis you can take when approaching the forex: 1. Fundamental analysis 2. Technical analysis. There has always been a constant debate as to which analysis is better, but to tell you the truth, you need to know a little bit of both. So let’s break each one down and then come back and put them together. Fundamental Analysis Fundamental analysis is a way of looking at the market through economic, social and political forces that affect supply and demand. (Yada yada yada.) In other words, you look at whose economy is doing well, and whose economy sucks. The idea behind this type of analysis is that if a country’s economy is doing well, their currency will also be doing well. This is because the better a country’s economy, the more trust other countries have in that currency. For example, the U.S. dollar has been gaining strength because the U.S. economy is gaining strength. As the economy gets better, interest rates get higher to control inflation and as a

Did you ever see the movie The Italian Job, and if so do you remember when John Bridger asked: “You see those pillars over there, that’s where they used to string up thieves who felt fine.” Make the transition from paper trading to real money trading and you will feel FINE too – Freaked-out Insecure Neurotic and Emotional. And what a great analogy ‘string up’ is, because after all those months of paper trading winners are replaced with real money losses, that is exactly what you will feel like doing to yourself. The Trading Psychology Viewpoint No discussion about trading, or the consideration to begin trading, can be done without a harsh realization - the vast majority of all traders lose. It is said that the reason that most traders lose is because they are not psychologically prepared to trade, that is they are not prepared to accept financial risk for something of which they have no control over the outcome. Forex Trading is much more of a psychological problem then a methodologica