How to Trade Forex like George Soros

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Back in September 1992, George Soros pulled off a coup that still is legendary in forex circles today. He took a close look at the fundamentals underpinning the British pound, and reached the conclusion that the Bank of England could not support its currency if it was aggressively shorted. He put his money where his mouth was, and ended up making $1 billion by breaking the Bank of England.
Forex in the spotlight
When George Soros took down the Bank of England, forex was an exotic investment that few investors – particularly small ones – had access to. More than two decades on, and the world has changed. The size of the forex market dwarfs other financial markets, and you can start to trade online in as little as minutes.
“Soros looked at fundamental drivers and conditions in the market to identify the vulnerability of the British pound”
However, much of the volume in retail forex trading comes from technical analysis – traders looking for patterns in charts that indicate potential upcoming currency moves. Often, trading takes place at a fast pace, with investors entering and exiting positions in days – or even hours. Many of these investors pay little or no attention to macroeconomic drivers, instead relying on mathematical signals to execute their trades.

Fundamental analysis
What Soros did was different. He looked at fundamental drivers and conditions in the market to identify the vulnerability of the British pound. While few of us have the resources to do what Soros did, fundamental analysis can nonetheless be an extremely powerful investment tool in the forex market.
Time and again, currencies have responded to these fundamentals. For example, the euro has suffered due to the ongoing economic crisis in the euro zone. The Canadian dollar has seen a precipitous decline against the US dollar recently, due in large part to concerns over declining oil prices. Strong economic performance, combined with expectations of rising interest rates, have propelled the US dollar higher against most other major currencies.
On the other hand, you may also consider buying ETFs that simply track the performance of a currency. For example, there are ETFs that track the dollar index – which is a weighted index of the value of the US dollar compared to a number of other major currencies.
 source :  http://forex.info/
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