forex for dummies

When playing a forex,a money management is very important.Money management is a way traders control their money flow: in or out of pockets... Yes, it's simply the knowledge and skills on managing a personal Forex account.There are several rules of good money management,one of that is by putting a small risk percentage of your total account.

Why is it so important?
The main idea of the whole trading process is to survive!
Survival first, and only then making money on top.

One should clearly understand, that Big traders first of all are skillful survivors. In addition, they usually have deep pockets,which means that under unfavorable conditions they are financially able to sustain big losses and continue trading.For the ordinary traders, the majority of us, the skills of surviving become a vital "must know" platform to keep trading accounts alive and, of course, to make good stable profits.
Let's take a look at the example that shows a difference between risking a small percentage of capital and risking a bigger one.In the worst case scenario of ten losing trades in a row the balance of trader's account will suffer this much. Below are the table of your money management as your guide.
source:freeforextips

Economic calendar is created by economists where they predict different economics figures and values according to previous months. It contains next data:
Date — Time — Currency — Data Released — Actual — Forecast — Previous

For example: If the forecast is better than the previous figure, then US dollar usually is going to strengthen against other currencies. But when news are due, traders have to check the actual data.

If to look at oil prices, a rising price will result in weakening of currencies for countries which depend on huge oil import, e.g. America, Japan

The example of econimic calendar can be found here

Step to read economic Calendar

Impact factor — suggests how much influence current economic data is expected to bring along.

It is important to know the time of High impact data release if you trade affected currency pair.During actual news release market becomes volatile. The strength of the volatility depends on the "factor of surprise" brought in the news."Factor of surprise" can be defined as a level of unexpectedness, where traders compare Forecast data to Actually released data.

Medium impact economic data should also be kept in mind in case the factor of surprise turns to be high. Low impact data most of the time do not shift Forex market significantly.

Column Previous in Forex Calendar — provides data from last release.

Column Forecast indicates numbers that economists are predicting and expecting for the upcoming release today.

Column Actual is updated only after the data is out. At the very second when data becomes available it is instantly compared against Forecast values, and depending on overall positiveness or negativeness of the news for the currency plus taking into consideration the factor of surprise, price dips or rises in a matter of seconds.

Economic News impact — increased market volatility — usually lasts for 1-3 minutes (highest volatility); next 5-10 minutes market experiences corrective/adaptive volatility, where price settles in summarizing new market shift.

Profitable trades!

source:.forex-fundamental-analysis

Fundamental analysis in Forex is a type of market analysis which involves studying of the economic situation of countries to trade currencies more effectively.

It gives information on how the big political and economical events influence currency market. According to this method, the analysis of economic indicators, social factors and government policy of a business cycle can forecast price movement and trends of the market. The fundamentals of any country, multinational industry or trading bloc lie in the combination of factors like social, political and economic influences.

Figures and statements given in speeches by important politicians and economists are known among the traders as economical announcements that have great impact on currency market moves. In particular, announcements related to United States economy and politics are the primary to keep an eye on.

Though, it is rather hard to stay aside from all these variable factors. So, the sphere of complicated and subtle market fundamental lets the explorer know and understand more details of a dynamic global market during the analyzing.

It is possible to predict the conditions of the economy but unlikely the market prices by using the fundamental analysis. You should have a certain plan of action concerning the ways of using the information as entry and exit spots in a certain strategy of trading. Forex fundamental analysis is a fundamental strategy of trading widely used by online trader of forex

A decent forex fundamental analysis includes a number of macroeconomic factors like economic growth rates, interest rates, inflation, unemployment level and others. The market supply and demand coming from political and social powers is the aim of fundamental analysis. The market supply and demand balance forms the currencies prices. The interest rates and the overall economy strength are the two key factors that influence the supply-demand balance. The overall health of the economy can be understood through a number of economic indicators like GDP.

The interest rates and international trade are the factors analyzed the most carefully. In order to create the forex trading strategy fundamentalist traders create models. The empirical data is gathered in these models for further forecasting the possible price trends and market behavior basing on the key economic indicators.

Any data making the country tick is considered as fundamental by forex traders. The fundamentals are the combination of certain plans, unpredictable behaviors and unforeseen events found out from the factors like interest rates and the policy of central bank and even natural disasters. That's why it's better to be aware of the affective contributors of all these factors than to all the fundamentals listed.