Forex indicators can be used for both fundamental and technical analysis, however their use for technical analysis is more substantial. There are thousands of technical indicators, and there new indicators are created every day. The fundamental technical indicator is the exchange rate, all other indicators are in some way based off of the exchange rate.
The exchange rate is a base for most technical indicators, the trend is the second key technical component. Trend based indicators are usually either categorized into trending or non-trending (or oscillating).
Support and resistance gives the feedback required to formulate a trending or oscillating technical indicator.
The most common fundamental indicators, that can also be used in a technical indicator, are listed below.
* Gross Domestic Product (GDP)
* Retail Sales
* Industrial Production
* Consumer Price Index
* Balance of Payments
* Interest Rates
* International Trade
* Durable Goods Orders
* Current Account Balance
* Employment Cost Index
* Jobless Claims
* Non-Farm Payrolls
* PMI Index
* Producer Price Index
* Payroll Employment
* Housing Starts and Building Permits
What are forex options?
Options are often associated with the stock market however options are also a derivative associated with the forex market. Options are a tool used to limit risk and increase profit. Options are available as either a call/put or a SPOT (Single Payment Option Trading)
A call/put gives the buyer the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.
Single Payment Options Trading (SPOT) options allow you to enter a trading scenario and pay an option cost (premium quote). If the scenario occurs then the buyer receives a payout, if it does not the buyer loses their option cost.
SPOT options have the benefit of defining more scenarious when compared to a call/put, their downside is a higher option cost.
Beginners lose money in Forex
There is feast and famine in forex. Some traders make over six figures a year, they drive expensive cars, and they live in large homes; They are the minority who enjoy the feast. The majority suffer the famine; They lose their savings and have trouble paying their car payment and rent/mortgage. I have read some estimates that as much as 90% of forex traders this year will lose money.
Making money with forex is not impossible. As with most things, you get out what you put in. Profitable forex trading has a steep learning curve. It takes most beginners at least 1 year to become a profitable trader.
The first step to becoming a profitable trader is to learn everything you can about Forex. There is plenty of information both online, and offline, that beginners can learn from. You may need to wade through the murky waters of online Forex information to find unbiased information.
Most Forex sites out there are trying to sell something. Books are a great resource for the Forex beginner. Visit your local library to make use of free resources before purchasing a Forex book.
The second step to becoming a profitable trader is to trade, without real money. Make use of a demo/free/practice account to trade Forex. Most Forex trading sites offer a demo accounts. Practice strategies with the demo account until you have reached 3 months of consecutive profits.
Cautiously fund an account after you have reached 3 months of consecutive profits in your demo account. Cautiously is the keyword here. Some beginners can trade profitably with demo accounts yet they have difficulty when their money is at stake.
The psychological aspect of trading may be difficult to overcome, for some it may be more difficult than learning the technical aspects of trading Forex. Remember that most beginners lose money. The last thing you want to do is lose everything you have.