Currency traders make decisions by analyzing technical factors and economic fundamentals.
Traders must decide which style and/or combination of analysis works best for
Technical Traders: Technical traders make their decisions using two
primary tools: 1) Charting tools (trend lines, support and resistance levels,
etc,) and 2) Quantitive Trading Models (mathematical analyses to identify trading
opportunities). Whether using proprietary charts and/or models or those developed
by third-party providers, the goal of a technical analyst is to study historical
data or past behavior of the market in order to predict future market movements.
Fundamental Traders: Fundamental traders analyze key economic data,
including news and government reports, to evaluate trading opportunities. From
the fundamentalist perspective, currency exchange rates are affected primarily
by economic and political conditions, and occasionally by central banks intervening
in the currency markets in an attempt to influence the value of their currencies.
Some of the key figures tracked by fundamentalists include interest rates, inflation,
trade balance, GDP (Gross Domestic Product), CPI (Consumer Price Index), PPI
(Producer Price Index), capacity utilization, factory orders, durable goods
orders, inventories, and employment statistics. Fundamentalists are also constantly
evaluating the potential impact of military conflicts, natural disasters, and
changes in political leadership
BizFOREX provides a news link via its IFT Platform, providing links to
news and information.
Another factor that often influences trading decisions is market sentiment.
Traders often read news, analyst reports, and Web site bulletin boards to get
a sense of the general market sentiment and then trade either with or against
In addition to the news and FX Directory mentioned above, the IFT Platform
includes a bulletin
board (forum) feature allowing investors/speculators to share market insights
and gauge market sentiment.