Systems And Strategies Based On Technical Analysis
It is difficult to stay in the currency trading business unless you can effectively analyze the market trend
. As an experienced trader, you may have your effective methods to analyze the trend. New entrants may depend upon certain readily available tools that are available in the market. Newspapers, business magazines and certain business channels bring out special editions about the latest trend. In depth trend analysis is made available for the benefit of the investors. The trend analysis presented by these news agencies and medias may not be same as they adopt different parameters and methods to arrive at the latest trend.
Some times the investors are confused to take any decision based on the trend presented by these agencies as wide variations are noticed between various reports. The investments in the trading is to be made after carefully analyzing the trend as reported by different agencies as you can not totally rely on the accuracy and also authenticity of these trend analysis.
Primary trend: The trends can be mainly classified as primary, secondary trends. Primary trends will always be in a stable direction for longer terms say several months or years. This trend is usually based on certain basic fundamentals such as the state of the economy of the country, performance of various sectors of the industry and export and import volume for the current year. Most of the trend analyses rely on the primary trends
Secondary trend: This trend is generally known as reactive trend and remains temporary based on certain factors. This trend is also to certain extent related to the prices of other commodities. If the gold prices rule high the investors and traders will prefer to invest on gold and the currency market will rule low. Similarly, if the oil prices in the world market are lower then it will have impact on the currency trading. Any trend analysis should take into account all these factors into consideration. The trading may also react due to sudden change of policy of the government or notifying of a new enactment by the lawmakers.
Daily variation: This trend variation may occur daily for a few hours based on the volume of transactions. This type of variation in the trend is mainly due to the emotional trading of investors.
How to play safe: It is really a magic to make money in the market. You must know the tricks to turn the market conditions to your flavor. Some people trade when the market is down and some people trade when the market is up. Whenever they buy, it is not a matter but the profit is that one that will ultimately count.
If you are carried away with short-term reaction and invest heavily, then there is high risk that you may loose your investments substantially. It is always better to go along with the long-term trend .It is always safe as they based on strong fundamentals. There are lot of soft wares are available with graphic presentations that may precisely predict the trends. Such trend analysis is useful to the new entrants as they lack experience and professional approach. Trend analysis is only indicative and ultimately your decision will only make the difference. In other words it plays a supportive role to take a more appropriate decision.
by: Howard Koppel
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