Basic Forex Strategies – Fundamental and Technical Part 2

On the first part of this article we have talked about simple overview of the two basic Forex strategies. In this article we will tackle a more detailed understanding about these two Forex strategies. Understanding both is a must for all Forex investors.

Fundamental analysis is a much more difficult decision. An investor using this strategy is putting a currency’s value on an entire country. Financial experts find this strategy to be useful in long term trend prediction. It can also be used in short term decisions and investors use current news releases for decision making. Certain indicators are being used for fundamental analysis. These indicators may be the Consumer Price Index and Purchasing Managers Index. There are also two important meetings that an investor must be updated with – the Humprey Hawkins Meeting and the Federal Open Market Committee. This two meetings help a trader foresee both short and long term trends.

Technical analysis is more popular among Forex traders. Traders use time factors to analyze the price trend. Price trend is the basis of forex traders in their decision making prices. Technical analysis have 3 common styles of analysis – Fibonacci Studies, Parabolic SAR Pivot Points and the Elliot Waves. A broker should explain to an investor what these styles of analysis are and let the investor decide on which he is more comfortable in using with.

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