When you are talking about the online trading game, there are many facets you need to understand to get ahead. We are encountering one of the most volatile and unpredictable markets of all time, and because it is based on the fluid integer and fundamental make up of the global economy, you are then able to understand why it is so volatile, formulate a strategy around it and thus make some money from it. Many people are making money from this lucrative investment platform and what you need to understand is the fact that they are doing so because they have an understanding on the market that is more than just fundamental.

One of the things you need to know about is what really affects market psychology and this is a look at the fundamental analysis you must first master to fully be prepared when the market moves without you knowing. Market psychology is affected by many things, and one of these things are the external things that would make investors jitter. You have to know that there is a by phrase when it comes to the paper trade, which is ‘sell the sizzle, not the steak,’ This is because the market will actually get excited by things that are not even happening yet, but has the possibility of happening. There are two main things that affect fundamental analysis and the basic psychology of the market, and they include things like economic and political factors.

Economic factors can fall into anything like world trade, the condition of world economy, recession, the rate of inflation and how currencies move when affected by actions by large central banks. Political factors might include anything from exodus, new political parties, new governments coming to power and even wars. This is because when talking about the strength of a currency, it is strongly related to the stability of the country. When the country is stable and in an economic surplus growth, then you will find that the currency of the country will be strong when compared to other countries. Knowing that the exchange rates work on a zero sum formula, which means that when paired together, one rises, and one will then fall.

This forms the fundamental basis of the Forex market. This is what you must master. You have to have your finger on the pulse of all the media, you need to watch the news and you need to know the financial news so that you can effectively forecast the market. Add to that a Forex system and a large dollop of technical analysis, then you will have the means necessary to get a grip on the online trading currency game. These are all the tools you need to dissect the market, look inside and pull out the fleshiest parts for yourself. The problem with most of the new investors is that they tend to ignore this and do their own thing, which leads them to crash and fall. Don’t fall prey to the same mistakes, get a grip on the online trading game today.

Author's Bio: 

Click Here to claim your Free Forex “Basic Momentum Analysis” report today! Christopher Lee helps thousands of traders learn the proper way to trade currency. He is an authority on Forex candlestick trading at Forex-Trading-Profits.com.