Today, we'll discuss how to do an analysis of the forex markets and the trades you'll be making. Not "how" as in perform step one, step two…, but "how" as in how to get your brain to think – technically, sentimentally, and fundamentally. Most forex experts use a combination of these three thinking methods, and in order to be successful you will need to as well.
The Technical Thinker
The technical thinker looks at trading histories and price movements in order to discover patters that help them determine their next move. Our previous post on learning from history is the mantra the technical thinker lives by
(thanks again Mr. Churchill). Technical thinking is at the root of most good forex software, and it is an important component in your trading strategy.
The Fundamental Thinker
The fundamental thinker is one of our favorites as they possess an understanding of the basics behind this money system – the law of supply and demand. By keeping in mind the fact that economies are built entirely on the amount of products they produce and the number of people willing to purchase these products, we have defined the core of what makes forex exist in the first place.
The Sentimental Thinker
We never want your trading to bring to to tears, however there are reasons why the sentimental thinker must be a part of your trading arsenal. Why sentimental? Because some decisions require your gut instinct (and technical and fundamental instincts as well) in order to achieve success. Although we rarely let the sentimental thinker take control for long, we do want you to listen to the voice of the sentimental to avoid the "Something told me to…" conversations with yourself.
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