What is Forex?
FOREX is also known as FX or Currency Market and commonly famous for FOREX TRADING. FX Trading is buying of one currency to another and Currencies are always traded in pairs. I.E – EUR/USD, GBP/USD, GBP/JPY
With the vast amount of traders Forex is the largest financial market in the world which has a turnover of $5 Trillion a day or more. This mammoth success in Forex had started to boom after the internet. Forex neither has a physical location nor a central exchange, the entire market run electronically within a network of banks. FX market runs continuously 24 Hours a day 5 Days a week which is considered as one of the best advantages for traders all over the globe. Also London is known as the heart of Forex since 80% of FX trading is done there. The FX Market starts from Sunday at 22:00 Hrs GMT & closes on Friday at 21:00 Hrs GMT.
The methods used to analyze Forex and make investment decisions fall into two very broad categories: fundamental analysis and technical analysis. Fundamental analysis involves analyzing the characteristics of a currency pair in order to estimate its value. Technical analysis takes a completely different approach; it doesn't care one bit about the "value" of a economy or a commodity. Technicians (sometimes called chartists) are only interested in the price movements in the market.
Technical analysis and fundamental analysis are the two main schools of thought in the financial markets. As we've mentioned, technical analysis looks at the price movement of a currency and uses this data to predict its future price movements. Fundamental analysis, on the other hand, looks at economic factors, known as fundamentals. Let's get into the details of how these two approaches differ, the criticisms against technical analysis and how technical and fundamental analysis can be used together to analyze Forex.