As a forex trader, you should know that interest rates are an integral part of investment decisions and can drive the currency markets as well as the stock markets either direction. Federal Open Market Committee rate decisions are the second largest currency market moving release behind the unemployment figures.

Commodities, namely gold and oil, have a strong and substantial correlation with forex markets. By understanding this relationship between gold, oil and currency pairs, you as a forex trader can gauge risk, forecast price changes as well as understand exposure.

Most forex traders analyze and predict the future direction of currencies using fundamental or technical analysis. The craftier among them use the combination of both to predict direction of forex markets.

There are two types of forex traders. One type of traders depends on fundamental analysis in trading forex. The second type of traders depends on technical analysis in trading forex. Whether you are a fundamental trader or a technical trader, you should not underestimate the importance of economic data in shaping trading strategies.

No matter what happens, there is always a bull market in forex. If one currency goes down, another goes up in forex markets unlike in stock markets where there is either a bullish or bearish market.