forex

 
“Look dad, no hands!”

Foreign exchange trading is probably the most technical of any type of trading. From stocks to bonds to options and futures, no market has as much participation from technical analysts than the forex market. However, just because the majority are technical traders doesn’t mean there isn’t plenty of room for fundamentalists.

No Indicators Forex Trading

Trading without indicators means you’ll likely rely more on the fundamentals like trade balances, national debt loads, central bank actions and many other non-chart indicators.

Here is a list of the items often covered by fundamental traders:

• Currency Interest Yields
• Central Bank (Monetary) Policy
• Fiscal (Government Spending) Policy
• Trade balances or imbalances
• Employment (Non-Farm Payroll Report in the United States)
• And many more

For the Long Term

Most fundamental traders perform best with a long term trading horizon usually multiple times longer than technical traders who are frequently day or swing traders. George Soros, arguably the best fundamental (no indicator) trader, made more than $1 billion in just a few months betting against his own country (England’s) currency.

If you’d like to avoid indicators clogging up your computer real estate, long term forex trading may just be your cup of tea. Maintaining a long term investment perspective allows you to ride out the ups and downs made by the short term trends made by technical traders, and realize profits on the long term movements caused by underlying economic trends.

For example, China, which has a strong economy and an excellent trade balance should see higher currency prices in the future. However, in the next 15 minutes, their currency may easily drop .25-.5% before rising several percentage points over the course of years. While technical traders would grab the small pips, no indicator traders would have the several percentage point move in the bag, netting an excellent profit.

This entry was posted on Tuesday, July 27th, 2010 at 10:31 am and is filed under Forex Tutorials. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.