The exchange market demonstrates such unpredictable dynamics that all advisors and the best forex indicators without competent trading management remain completely useless tools. Therefore, the task number 1 of any beginner is to learn how to make a quality Forex forecast. It’s also important to go through NS Broker regulation so you will be comfortable on the first steps. We’ll look at what options exist and then try to opt for one of them.
It is here that all kinds of lines, forex advisors, indicators and other supporting applications are used. All the mechanics of the transaction is as follows:
- A trader receives a signal to enter a position based on the data that the tools used by him demonstrate.
- There is an immersion in the deal. In most cases, this moment does not have a clear reference to time and is determined by the internal instinct of a market participant (his experience, conclusions, forecasts).
- Exit a position and fix the result. The main emphasis here is on compliance with the rules of money management, when the level of potential risk is two or more times less than the expected profit.
The forecasting quality is affected here by the trading rules by which the selected earnings technique operates. In this regard, profitable Forex strategies must meet the following parameters:
- Clear logic based on the laws of market mechanics. At least three mutually complementary conditions on the basis of which the trader decides to enter the transaction.
- The correct risk / reward ratio.
- High performance that can be verified in history.
- Clear conditions to leave the position on time.
This forecasting method refers to the study of financial and currency events that can affect the dynamics of the foreign exchange market. This is the most complex and key way of analytics. Only truly competent traders are able to effectively apply it. The main problems are related to the fact that the same events in different conditions are displayed differently on the market. Suppose you need to make a forecast for the euro dollar currency pair in November 2015. In this case, the actions of the trader will look like this:
- The initial assessment of the situation is based on the data prescribed in the Economic Calendar.
- When suitable conditions are selected, a preliminary forecast is made regarding future price behavior. The situation is aggravated by the axiom that states that it is necessary to buy assets by ear, and to sell on the basis of prevailing facts.
- Related factors and circumstances are studied that confirm / refute the forecast made. Here you need to be able to filter information and work only with primary data.
- A deal is being made. In contrast to the previous forecasting method, the emphasis is on short-term impulse movement, after the completion of which an exit from an open transaction occurs immediately.
This implies a combination of the two methods listed. That is, when it is necessary to make a forex forecast for today, the trader begins to act according to the following scheme:
- The market is predicted based on the signals of the selected trading strategy.
- Received signals are checked using the Economic Calendar and related financial information.
- Based on the findings, entry into the market is carried out.
Having studied the main methods of market analysis, we can safely say that exchange rate forecasts are more likely to be executed if we combine technical and fundamental methods. And do not forget that for trading you need to choose a really good platform. It is most convenient to trade through NSBroker. Try, perhaps it was this information that you did not have enough to improve your performance.