Monday, December 1, 2008

Forex Market Research And Forecasting


A market expert doesn't often illustrate the possible pitfalls of forex market with analogies about shoe shopping as Marilyn McDonald does in "Forex Simplified," but that is part of this book's charm. It is both entertaining and educational, with a conversational tone and genuine enthusiasm for forex market trading not always found in similar tomes.
The book is geared towards beginning forex market traders, offering basic definitions and outlining common traps for novice traders. She advises avoiding companies that promise little or no risk and firms that pressure you into trading immediately. She explains the importance of researching a company's track record before trading, and the book emphasizes throughout that forex market trading involves risk and requires discipline.

The book includes a chapter on the benefits and components of both fundamental and technical analysis as they apply to forex market She explains macroeconomic indicators, asset markets and politics as well as the finer points of technical analysis including trends and types of indicators.
For those interesting in being involved with forex market trading, a central understanding of how the system works is essential. Understanding both forecasting systems and how they can predict the market trends will help forex market traders be successful with their trading. Most experienced traders and brokers involved with forex market use a system of both technical and fundamental information when making decisions about the forex market market. When used together, they can supply the trader with invaluable information about where the currency trends are headed.

Always leave the forecasting to the pros unless you are playing the forex market as a hobby and don't have a lot of money invested.
Another chapter offers advice on economic news and how it affects the market. McDonald says that beginning traders especially shouldn't trade the news, because, just like in the movie Fight Club, there are two rules in Trade Club: 1 ) The market doesn't make any sense, and 2) Even when it seems like it is making sense, the market doesn't make any sense.
There is a section on automated trading and how to write and test automated strategies, as well as a chapter on the role that emotions can play in trading. McDonald encourages traders to stay focused and set goals and stick to them. She says you will get emotional when you trade, but don't let your emotions get in the way of making rational decisions.

The book also offers steps for developing a trading plan that includes strategies for buying, selling and holding, and advice on the best times to trade. McDonald notes that while a lot of forex market traders say the best time to trade is at 2 a.m., the best time to trade is really any time there's more than one market open (i.e., when there's higher volume and higher liquidity). The book is breezy in tone, but by no means short on valuable information. Its appendices offer further research and graphs on common indicators, chart patterns and a guide to reading candlestick patterns, as well as more information on specific economic reports and a glossary of common forex market terms. "Forex Simplified" is a great resource for the beginning forex market trader and an interesting read.

[ForexGen Demo Accounts Contest ]

Win Cash Prizes

ForexGen has the pleasure to announce the launching of the Demo Account contest on the first of every month.

1 comment:

Blogger said...

eToro is the #1 forex broker for beginning and advanced traders.