Forex trend forecasting.

The entire process of trading on the Forex currency market is divided into two main components: market analysis and forecasting the future trend.

These two stages are the foundation for successful trades, so they cannot be considered separately, as without analysis, it is impossible to make an accurate forecast, and without forecasting, it is impossible to open a successful trade.

Forex trend forecasting is classified depending on the trading timeframe and the planned duration of the trade.

In short-term trading , the entire forecasting process boils down to simply identifying patterns, as long-term forecasting on short timeframes is meaningless.

Therefore, we first conduct a visual analysis of the existing trend, identify its direction, and determine the type of movement. The trend can move within a price channel or chaotically. Based on the data obtained, we build a forecast and plan the most favorable market entry point.

In medium-term trading , technical analysis and, consequently, forecasting itself will take more time, and technical analysis indicators can be used as aids. Trend forecasting is conducted in the same way as in the previous case. The only difference is that for a more accurate forecast, the influence of fundamental factors should be taken into account.

It is practically impossible to predict how the price will behave when a particular news release occurs, but these times can be identified as points of possible trend reversal.

Long-term trend forecasting is a rather complex process, as seasonal price fluctuations are added to the factors listed in the previous options. For example, let's say you're forecasting oil prices in November of this year. It's a known fact that energy prices always rise during this time. Therefore, you should take this into account and adjust the existing trend.

Forecasting has always raised a lot of questions for novice traders, but if you want, you can try to simplify the process to a minimum.

I'll try to explain this issue using my own example. Usually, when I launch my trading terminal, I study the chart of my favorite currency pair and look for patterns in its behavior. If any patterns are present, such as fluctuations in the price channel, I place an order in the most favorable position.

However, if market analysis reveals a complete lack of patterns in Forex trading , I simply postpone trading and wait for a more convenient moment.