There are three types of traders in the forex trading business. Fundamental traders, technical traders and forex traders that utilize strategies from both fundamental and technical disciplines. They can be found not just in Malaysia but worldwide. Fundamental traders are forex traders that utilize fundamental analysis to predict the general direction of a curency pair. Fundamental analysis is concerned primarily with events that affect the currency.
Economic reports such as unemployments rates, interest rate changes and the trade balance all greatly affect the value of curencies. As such, fundamental forex traders always look towards news events and releases in their attempt at predicting the currency's general direction. It is used for both short-term and long-term forex online trading. Technical forex traders are not concerned with these economic events. They use technical analysis to give them an edge in forex trading.
The study of technical analysis is one that identifies chart patterns to predict the general movement of the currency pair. Support and resistance levels, fibonacci levels, moving averages and trend patterns are some of the techniques used by the technical forex trader. The third type trader is one that draws strength from both fundamental and technical analysis. Most traders use both techniques to some degree but never in equal amounts. Forex traders usually have a dominant discipline that is further enhanced by either technical of fundamental analysis. It will take a while for the beginner to truly find their sweet spot so to speak. But eventually as time passes, beginners will begin to feel comfortable with forex trading a certain way. This may or may not be a mix of both disciplines but it is highly likely. By far and large, the biggest type of online trader prevalent today in Malaysia and the rest of the world is the technical trader. This is so mainly because technical trading aspects are much easier to grasp. Fundamental trading requires a very strong grasp of international economics. Something that most people in Malaysia do not possess.
The internet is rife with free forex signals and online forex courses that claim to make you the perfect forex trader. It is easy to see them for what they are. It is better to stay away from those that make the most outlandish claims, i.e "Make $100 a day after my 7 day course!". It should be noted that there is a vast amount of free information regarding both fundamental and technical analysis available on the internet if you search the internet.
It is in the end, your money. It is too easy to fall into traps that promise the world. One should always start from scratch. Visit forex factory and investopedia and learn all you can. The road is hard and is frought with danger but it is important to remember that success in forex trading comes to those that try hard and long enough to make it a worthwhile endeavor. Back to Forex Trading part 1.
