CHARACTERISTICS OF FOREX MARKET AND TRADING STRATEGIES BASED ON TECHNICAL ANALYSIS
CHARACTERISTICS OF FOREX MARKET AND TRADING STRATEGIES BASED ON TECHNICAL ANALYSIS

Summary/Abstract: This paper is concerned with analyzing trading strategies on the foreign exchange (FX, or FOREX) market on which currencies are traded against each other, at exchange rates that vary constantly. FOREX is a decentralized financial exchange market, distributed worldwide and deregulated, for trading spot currencies. We first presents the main characteristics of the FOREX Market. Then some concepts, chart types, indicators and investment performance measures of technical analysis are explained and exemplified for the case of EUR / RON exchange rate. Finally, the principles of trading strategies based on technical analysis are introduced and a back testing procedure for evaluating such a strategy is illustrated on the EUR / RON exchange rate.

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