Read these 4 Introduction to Forex Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Forex tips and hundreds of other topics.
The riskiest, yet most glamorous form of trading in the Forex market is day trading. In recent years, the life of a day trader has become sensationalized by the media - yet few see the actual hard work that happens.
Before embarking on a day trading career, make sure that you have adequate funds to trade, an ultra fast computer and Internet connection, and the ability to watch the markets constantly as they run 24/7.
Also, make sure that you have the knowledge necessary to be profitable in such a fast paced, volatile arena.
If you really want to become a Forex expert, web-based information mostly designed for beginners is not going to be enough to take you there.
Luckily, there are many wonderful and detailed books available to study at length - taking you to the next level in your trading and market understanding.
One such book is Forex Trading for Maximum Profit - the Best Kept Secret Off Wall Street by Raghee Horner. This book starts with the basics, but quickly moves through trend line analysis to Fibonacci analysis - giving you all the tools of professional traders. It is available on Amazon.com and many major bookstores.
Another great book is called Left Brain Trading: The Right Mindset and Technique for Success in Forex - by Lewis Evans and Olga Sheean. Much of your success in Forex will be due to your mental conditioning and ability to make decisions based on logic rather than emotion. This book helps you attain this level of control, and also gives additional visual tips and aides. It is also available from Amazon.com
Technical analysis is an alternative trading technique to fundamental analysis, and refers to the process of using charts and graphs to spot trends in currency prices.
The most often used technique is determining the market cycle - which is how long the currency takes to move from a low to a high and back again. However, technical analysis can be a haven for number crunchers - as it can get as complex as using Fibonacci numbers to anticipate changes in price trends.
A great book on technical analysis for "finance geeks" is The Forex Chartist Champion: A Visual Approach to Technical Analysis by Michael Archer. It is available from Amazon.com.
Fundamental analysis refers to the strategy of understanding the countries currency you are trading by looking at it's economic strengths, key indicators, GDP, and capital flows. Trade deficits and flows are also very important in fundamental analysis for Forex.
It is an alternative to technical analysis, which relies on charts to spot trends.
Most traders use either fundamental or technical analysis in trader, and the two camps argue as to which approach is best.