How to Perform a Forex Analysis

How to Perform a Forex Analysis with LucrorFX.Forex trading allows everyone to profit from the currency market. When trading forex, an investor places a leveraged trade against the exchange rate between two currencies, such as the Euro against the US Dollar. Since currencies prices can change rapidly, it’s important to use smaller orders when beginning.

Leverage represents the amount of money one is borrowing to trade currency. If a currency trade is leverage 10-1, a $1000 investment will shift in price like a $10,000 dollar investment. When learning about forex trading, it’s best to use less than 5-1 leverage to minimize a price shift. A high degree of leverage can zero or double an investment in seconds, depending on market conditions.

A forex analysis can be based on two types of research: fundamental and technical. Fundamental research looks at the history and economics of each currency, while technical research uses changes in exchange rate prices to predict future action.

When conducting fundamental research on a currency pair, it’s important to look at the politics and economics of the countries behind a currency. When trading the Euro/USD currency pair, look at how the European Union and the United States are performing. A great way to start is by looking at unemployment rates, national deficits, gross domestic product, and other economic factors.

It’s important to keep track of current events when doing fundamental research on a currency pair. Supreme court decisions, central banking issues, and current affairs in a country can make a huge impact on share prices. A great way to learn how these events impact an exchange rate is by researching historical rates. Look for a large news event that has taken place in the past year, and pull up an exchange rate chart to see how prices were impacted. Some news stories have a minimal impact, while others can cause a dramatic shift in exchange rate prices.

Technical research uses mathematics and algorithms to predict future exchange rate prices. Technical research assumes that the exchange rate price already represents all public information. Since markets react instantly to information, it’s impossible to learn anything that isn’t already reflected in an exchange rate price.

There are several tools one can use when conducting technical research. The ‘moving average’ of an exchange rate represents the velocity of price change over time. When a currency begins to change price, it often continues in the same direction for an indefinite amount of time. This can be a valuable tool when trying to predict future price movements.

These tools and many others are available at Lucror FX. Lucror FX provides a variety of tools for currency trading, and offers investors many tools for researching currency conditions. In addition, Lucror FX offers excellent customer support, allowing investors to communicate with trained professionals as often as needed. Contact Lucror FX for more information today.

Currency trading can be extremely profitable, but it requires the right investment tools. By using Lucror FX, it’s possible to use the same tools currency professionals around the world use to trade.

 

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