In the world of forex nothing lasts forever

Which are forex strategies that can best help you

How to find the most suitable for you in trading rooms

In the rapidly changing world of Forex market maybe there are two main ways of marketing - based on fundamental analysis and those based on technical analysis. Beginners and experts should regularly assess whether one technique has an advantage over the other or whether, if the two come together will be more appropriate for the purposes and needs.

Chris Bauhamb market analyst From Wall Street, certainly thinks it makes more sense both techniques can be combined (merged). "Everyone" trader "proves style in your own way of trading. Thus show both advantages and disadvantages and the key element in any style is the trader himself. Only he can measure the level of risk that can not afford to deal with their emotions. Coupled with this is good to combine technical analysis and fundamental approach, given the importance of the surrounding some economic issues, such as GDP, CPI and central bank decisions.

Simon Smith, a longtime trader, is more reserved terms, relying entirely on fundamental analysis.

"To trade forex entirely based on foundations and achieve long-term success, you must have a large pool of capital and nerves of steel, and even then it can be difficult. The phrase: "The market will remain irrational longer than you can stay solvent" applies to more forex than any other market, he said. "It is true also that the forex market is driven by the stream. Many players are there because they have to be, not because they believe that a currency is better value than the other. This can create stages in which exchange rates entirely ignore the fundamentals, just because they are not essential for the majority of participants.

Entry and exit points:

Smith believes that you can trade successfully with the basics, but had to understand and appreciate the technique to be informed where are your entry and exit points for trade. "Even the first large macro funds, which are traded currency, and avant-garde followers of the foundation require technicians to determine the trend (trend)."

While any Coton stick to the basics, there are many traders who trade primarily on technical basis. They do not have any fundamental look where it comes from each currency pair. Each quantitative trading strategy relies on the technicians behind the scenes, because the algorithms are based on historical price movements.

"Most traders choose the combination of styles, with few representatives in each camp using purely technical or purely fundamental analysis."

Jamie Saetel, which is a technical analyst believes that the success of marketing through technical style depends on how you apply. "There are many subgroups within the scope of technical analysis and some are so bad as in fundamental analysis. If someone uses the technique of the technical approach based on rules, then technical analysis has the advantage, you can calculate risk and change it if necessary. Fundamental analysis is too slow to alert the trader at the change in the dynamics of the market. "

Despite the preference for technical analysis Saetel insists it is a mistake to ignore entirely new economic releases. "Everything affects market prices should be taken into account. The key in dealing about economic data and / or news is the definition of the psychological state of the market. For example, if my approach based on rules winks for warning signs and if you confirm this news already find better borrowing position. However, Price patterns are repeated in different markets and in different time frame, although news and economic information that must affects these markets differently. These are prerequisites that news and economic issues are not the base structure which market prices, but rather mispricing of which can capitalize.

Forward flow:

Another advantage of technical analysis is that many key market players use it and as such have a strong influence on the market is not keeping track of technical analysis by some traders has a potential disadvantage because graphics can provide independent prophecies.

Kathleen Brooks, Research Director for Nomura, disagrees entirely with things. "Yes, some major players on the stock exchange using algorithms that include technical analysis, but could not quite understand what track or exact equations they use in their models. The main thing you should remember is with technical solutions that are based on human reactions - are trying to measure the balance of opinions on the market.

"There are millions of players in the Forex market, all with different time frames and objectives, so technical solutions can be very subjective. There are thousands of indicators that you can use. Therefore I can say that the heterogeneous nature of the technical solution can be a failure. Some people treat technical analysis as a science, but I can not argue that it is an art. "

Smith believes that traders who use fundamental method are potentially harmed if ignore technical analysis, but not for the reasons for which you think.

"Sometimes field work because the orders may be clustered around them, which can lead to a strong resolution. This is the reason why even those with a fundamental approach must be aware of the basic levels of the market, as well as technical analysis has to be some look at the basics, where important data or events have the potential to encourage the market to be "shifted" even if you do not look whether there will be a decrease or increase. "

But he argued that the key decision is technical analysis because one system and the potential to use graphics allows for successful marketing strategy and reliable risk management mechanism.

"You can test it again and will help you remove the emotion from trading, where many confused. Fundamental errors are to stick to losing trades, hoping to turn in your direction or to take profits earlier for the same reason. To build such a strong User Guide around the foundation is very difficult in forex, "he says. "The rules may apply for some time, but most of them are concurrent, as when the dollar falls, shares rise. Can be detected reliably supposedly rule, but in the world of forex nothing lasts forever. "

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