Forex Trading Fundamentals

Forex trading involves speculating on the future direction of currency exchange rates. Trades are always executed in pairs, such as AUD/USD in our example. If you believe the AUD will strengthen against the USD (or the USD will weaken against the AUD), you would "buy" the AUD/USD pair. Conversely, if you expect the AUD to weaken (or the USD to strengthen), you would "sell" the pair.

To build a forex strategy, traders use fundamental and technical analysis. Fundamental analysis evaluates a nation's economic health using key metrics like GDP, interest rates, inflation, and unemployment. Geopolitical events and market sentiment can also influence currency valuations.

Technical analysis focuses on charts, evaluating trends and past price movements using tools like moving averages and the relative strength index (RSI). This helps traders identify entry and exit opportunities.

The price of forex pairs can be influenced by various factors, including economic reports, interest rate decisions, and global events. It is crucial to grasp these basics before diving into your first trade to avoid common pitfalls. Learn more about the best trading strategies and techniques for forex.

You can use Axi’s economic calendar to view all upcoming economic reports and trade in 3 steps:

1. Choose an event on the calendar. This could be, for example, Nonfarm Payrolls (NFPs), Crude Oil Inventories, or the US Consumer Price Index (CPI).
2. Click on it to access advanced data such as event forecasts, the impact of the previous release, and the markets it affects, like, for example, EURUSD, GBPUSD, or the JPYUSD.
3. Make an informed decision for your next trade with the help of the data.