To start a trade you have to follow your trading system. Trading system is a set of rules set by you that lean on technical and / or fundamental analysis that is made by yourself.
Technical analysis is simpler. It covers chart patterns and indicators inside your broker software. When you see a reverse pattern such as double-top (w-top) or v-top you can go short. Short position refers to selling and long position refers to buying. There are many information on the net about different pattern types. There is also candle analysis which was developed by japanese. They used candle chart hundred years ago to trade rice. We'll discuss technical analysis later in this blog because it is the only analysis I use in my trading system, because it is fully computerized.
Fundamental analysis means reading all the major news, statements of economists with good reputation and following the official statistics of certain countries. This information induces you to buy or to sell. You have to be very careful with this type of analysis. Misunderstanding may cost you a lot of money. Even the intonation of a politic can reverse a trend. Moreover some bad news can make its currency stronger. It wasn't the case with the US dollar until the beginning of global financial crisis. When it happened, US dollar was growing by leaps and bounds, and every bad news within the US made it stronger against Euro. That made us to believe that US dollar is a shelter currency. Investors took their money back and that made exchange rate growing. So, that's the paradox.
You better take the best from both worlds. Try to foresee exchange rate using one or another analysis. Then see what gives you better results.
As you can see now trading isn't that attractive. You must take into account so much information to be competitive.
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