Forex Traders

Written by Jacey Harmon
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The most active traders in the Forex market are speculators. Speculators comprise of roughly 95 percent of the daily activity on the Forex market. Speculators are involved with the market with the sole intention of making a profit. The other five percent of the market is comprised of governments or international corporations that need to exchange profits in a foreign currency to their domestic currencies.

Analysis Techniques for Forex Traders

Fundamental analysis is the study of the underlying elements that influence a currency's value. Economic indicators, government policies, and social factors--these are a few factors studied with fundamental analysis. There are traders that believe that if your fundamental analysis is correct you don't need to worry about technical analysis.

Technical analysis is the study of purely market generated data. The studying of short term and long term price trends is an example of technical analysis. Technical analysts utilize price charts to visualize the actual price history of specific currency. They believe history repeats itself and you can profit from learning successful historical patterns. Many technical analysts believe the fundamentals are already priced into the market and hence are not necessary to study.

The best analysis approach would be to combine fundamental and technical analysis. Fundamental analysis is very useful for determining economic conditions but not necessarily predicting market direction. On the other hand, technical analysis is very efficient at determining market direction. When used in combination, a trader can understand why the market is moving and how to recognize changes in market direction.


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