hello uwcfx members
Forex's difficult, first, identify market is bullish, bearish or correction form, and second, to overcome the
adverse economic operation of human weakness, it is necessary to accumulate experience for this increased awareness, but also spare no effort judged on technical fundamentals, without which no shortcuts.
Let the trend be your friend
In the floating exchange rate system, any foreign exchange market only three, namely rising market, down market, and consolidation market. In the foreign exchange market, the consolidation market trading day each year about 70% -80% of the remaining 20% -30% would be classified as long or short market. A consolidation market, the investor must first identify the range of consolidation, and then in the comfort zone and sold, under the stalls to buy the so-called buy low and sell high in order to profit, and risk yet they are not too large, investment If someone rational implementation of the stop-loss strategy, or even increase the amount of investment in order to obtain greater profits.
But most people still think the market in due course 20% -30% of control long or short market, companies are moving operations. Operating profit mainly due to a very considerable advantage of the opportunity, and the number of stops out of the lower, so additional costs greatly reduced. Moreover, homeopathic operator is implemented rather than the inventor home, only in accordance with pre-existing market trends can be traded, is "knowing and doing are easy to" type, so market participants that "the trend is your friend" (Trendisyourfriend). However, the existence of transactions in practice two problems: First, how to identify market is bullish, bearish or correction pattern; First, the "contrarian" is hard to overcome the weaknesses of human nature. To overcome the weaknesses of human nature, usually by experience, the losses suffered by such means as increased awareness to achieve; As for how to identify market is bullish, bearish or correction pattern, it must be fundamental and technological aspects determined. Investors in the foreign exchange market, De operation, either the buyer or seller, basic premise should be first on the price of investment targets projections of Wu Wei Lai, Then according to Qi forecast Jueding investment Celue and operation of Fang Xiang. For example, when investors are bullish on U.S. dollar against the yen, it said that investors think the dollar will follow the pattern of the bull market, the yen is relatively short walking pattern, it should be to buy dollars and sell yen, which stood on a multi-day U.S. dollar element of the short side. If this prediction is correct, then investors will profit.
Master the fundamentals of data analysis
Fundamental analysts believe that the strength of the currency reflects the economic situation is good or bad, although its strength may be affected by the interference of other non-economic factors, while temporary fluctuations, or produce the opposite trend with the health of the economy, but in the long run , its price will eventually return to the point commensurate with the economic situation. As for - good or bad economic situation the country should be how to measure, then it may take a relatively comparable manner. Such as the U.S. economic growth in 1996 is estimated to reach 3%, the eyes on fundamental analysis, the data can not determine the dollar should be strong or weak, they should be with - to compare the annual economic growth rate, with Germany, Japan and other major national economic growth rate compared. If the United States the previous year's economic growth rate of 2%, while the year 1996, Germany, Japan's economic growth rate of about 1.5% of the standard, then the 3% of the data available to the fundamentals of those ideas are: the United States of the economic improvement of conditions for economic growth than Germany and Japan better than the U.S. dollar against the mark or the yen should be relatively strong, to reflect its economic strength. Fundamental analysis are the basis of indicators as a foreign exchange policy, buy dollars and sell yen, Mark.
The data reflect a state of the economy, that is commonly known as the economic indicators, in addition to economic growth, the numerous, including many, like the trade deficit, budget deficits, money supply, consumer price index (RPI), Producer Price Index (wholesale price index), the unemployment rate, housing starts, leading indicators. Betting, as the focus of fundamental analysis, the data will be published by the relevant government departments on a regular basis, this type of investment analysis of all to collect the data, further analysis and comparison, determining the orientation as the basis for future direction.
Kind of analysis and forecast is correct? Effect? Can see international investors, by setting the economic research department, responsible for analyzing the economic situation in major countries. Government agencies in the United States and other key economic indicators released before the market's investors will first settle foreign exchange position or reduce the foreign exchange positions, foreign exchange market is showing that the atmosphere of banking transactions through the night guard was waiting. After the release of economic indicators from the great masses, known fundamental analysis in currency markets indeed have a decisive influence.
The release of economic indicators, currency movements are affected, may be more powerful, it may weakening; the weak may be weaker, or strengthened, in the show "economic indicators for the market drivers" (Marketmover) true portrayal of the case influential factors involved in how foreign investors to ignore it? so regardless of the currency market, fundamental analysis and forecast the future trend of the correctness of what has long been fundamental analysis has indeed become the investment decision-making model by market participants.
Fundamental analysis for forecasting long-term trend
With fundamental analysis to predict the long-term currency movements, such as the next 6 months, 1 year or 2 years are fairly adequate, but since the abolition of the gold standard, internationally accepted system of floating exchange rates, factors other than fundamentals would be more or less affect currency prices. For example, the increasing size of the foreign exchange market, foreign investors who participate in the growing, international foreign exchange market daily trading volume has been
800 billion U.S. dollars in 1994, to 1995, 1996, 1 trillion 200 billion U.S. dollars, of which 80%, about 1 trillion dollars in volume is speculative ** Easy. Speculators every minute bought and sold in international markets, a large amount of the sale, will also affect the foreign exchange market.
The entire international community has become increasingly open, like a global village, international capital out of countries in increasing degrees of freedom. International payment systems, such as the U.S. C HIPS, UK CHAPS system, the transfer of funds are made faster, even in a snap. International funds like wings, hot money came into being, not only affect a country's monetary policy, more often distort the fundamentals of the currency should reflect the reasonable price, resulting in fundamental analysis of short-term failure, so foreign investors have gradually modified the application of fundamentals , in addition to long-term trend forecasting as a tool, but also with technical analysis of the information upon which to make investment decisions.
Fundamentals of foreign exchange movements long history textbooks mentioned in the "purchasing power parity" is an obvious example. Purchasing power parity theory holds that the basic relationship between the price of national currencies with all countries with equal amount of money to purchase an item directly related to the amount. Such as buying an egg, in the United States, Japan, Germany, 1 per each dollar will cost, 100 yen, Mark 1.5, you can infer that one U.S. dollar, 100 yen and 1.5 marks have the same purchasing power, thus During the currency price should be equal to 100 yen to one U.S. dollar is equal to 1.5 marks. But this kind of theory and current foreign exchange price comparison, find a currency is overvalued or undervalued. Another. Sampling of different goods, calculated there are differences in purchasing power of money, whether it be high value, underestimated, undervalued and overvalued rate will be different. Such as the U.S. economic research department of Merrill Lynch to provide the information point of view, in April 1996 compared with the dollar's purchasing power, currency has been overvalued yen, mark, Swiss franc, New Zealand currency, overestimate the extent of 35%, 20%, 10% and 9%; undervalued currency a pound, Canadian dollar, French franc, Australian dollar, underestimate the extent of 20%, 16%, 8% and 4%.
Foreign exchange market from the current era of fixed exchange rates has long been so great to a variety of political, economic news, small to rumors, rumors were enough to shock the market. Purchasing power parity alone to infer the price of money should obviously too simple, and investors can only deduce this theory as a reference currency prices
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Originally Posted by eskimo
