The currency market could be a good investment for your money. First of all, the forex market is open 24 hours a day, except for the weekends. Another factor is the large trading volumes and the large number of investors in this market make it very liquid. A intelligent investor can make good profits that are available in the foreign exchange market. With a bit of experience and some good knowledge, you too can be a profitable investor.

There are a couple of trading strategies in the forex market market which is, fundamental analysis and technical analysis. Let us take a look at each of these strategies.

Fundamental analysis, as the name says, deals with the social and political factors, government policies, GDP reports, employment, various industries, the business cycle and the economic indicators. Using the above data, the analyst can predict the future of the currency. The stronger the above mentioned factors of the country, the better future its currency has. This method is the prominent amongst the long term traders. However, it is quite difficult to predict the market during silent activity when analyzing fundamentally. This particular trading strategy is itself divided into two minor strategies, i.e., capital flows and trade flows.

Capital flows is money that flows through foreign direct investments in the form of joint ventures and third party licensing agreements that reflect the economic growth and financial stability of a region. Fixed income market investments and equity market investments are common portfolio investments. Trade Flows are the international imports and exports carried out between two different countries. It plays an important role in the currency market as the importing country needs to sell their currency in order to purchase the goods from another other country. This is a great example of currency exchange and a good way to predict the currency's future.World news and happenings as well as country specific happenings also affect the currency market. It is a good plan for the fundamental investor to keep a track of the global news and a country's relations when investing in its currency.

Technical Analysis is another trading strategy used in the forex market. This analysis predicts the future movements of the currency by having a look at its past performance. A technical trader studies past graphs showing the up and down movements of the currency.

Tools used by a technical trader are: Relative Strength Index (RSI): This is a ratio of the up and down movements of a currency that equates on a scale of 0-100. A second tool is Fibonacci numbers theory: The Fibonacci number sequence (1,1,2,3,5,8,13,21,34…) is used by adding the first two numbers to arrive at the third. As a forex investor, one may use them to project profit targets and price retracements. The last tool is Elliot Wave Theory: It is based on wave patterns and fibonacci number sequence. Good Elliot wave patterns shows a five-way advance followed by a three way decline.

These are the two trading strategies used while investing in the forex market. Each has its positive and negative points so it's up to you to chose which one you wish to follow. A trading strategy harms only when you apply it without correct knowledge.