In Forex trading is, as in other markets, that a strategic approach is much more promising than the action "from the gut". A strategic approach can in principle be of a technical or fundamental nature. Basis is either the technical or fundamental analysis.
Technical analysis attempts to anticipate based on price patterns and quantitative ratio sizes, the future market development. Basis of all technical considerations that make the price of the market, to be analyzed itself is divided into Technical analysis charting and market technology. The relevant section is discussed in greater detail these disciplines.
Fundamental analysis tries away from charts to assess the market development. Based on the fundamental approach are economic parameters, such as growth of gross domestic product, the interest rate policy of the central bank, money supply growth and inflation.
Regardless of whether the fundamental or technical analysis is based on a strategic approach that is always trying to develop a set of rules, based on the implications of trade decisions. In both cases, the basic idea that should be tried to improve the risk-reward ratio of eigegangenen positions by criteria are developed to increase the hit rate.
A set of rules on the basis of data - be they simple classes and their derivatives represented as indicators or fundamentals of Statistics and Central Bank authorities - created clear buy and sell signals, offers tremendous advantages: The "human", ie emotional component can be eliminated from the trading. The emotional aspects often lead to losses: Loss-trading positions are not closed in time and profitable trades ended too soon. A forex trading strategy can therefore significantly improve the trading results.
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