Self-analysis of the Forex market
Trading in the foreign exchange market is always carried out in two stages, the first of which is analysis, and based on the data obtained, forecasts of exchange rate movements are made.
The main object in this matter is the chart of the currency pair; it is on the basis of its history that all relevant conclusions are drawn.
To verify and confirm the obtained data, several methods of analyzing the foreign exchange market can be used at once, each of which is aimed at studying certain indicators.
Forex analysis methods.
There are three main methods used to analyze historical data - Graphical, Technical and Fundamental.
Each of them does not give 100% results, so to be completely sure, it is better to use at least two of the three options mentioned.
Graphic – the name of this method speaks for itself; it is based on the detection of graphic figures that arise as a result of trend movement.
It is understood that there is a certain pattern, based on which, after the appearance of one or another figure, the trend will make a reversal or continue its movement.
It is on the basis of this principle that the classification is made into reversal patterns and continuation patterns of the forex trend (trend).
The effectiveness of this method is around 65 - 70%, the main difficulty is to notice a new figure in time.
More about candlestick analysis - http://time-forex.com/ys
Technical – this option also includes analysis of forex charts; it is based on the statement that the price of a currency pair includes everything, that is, there is no point in analyzing external factors. That is why this method is the most used.
Its main stages are: building support and resistance lines, working with channels, calculating levels and minimum-maximum price points.
To automate the process, special Forex indicators are used, which not only take on part of the routine work, but also provide a more accurate result. And sometimes they predict the future movement of a trend, but this is more in the realm of science fiction.
Basics of technical analysis - http://time-forex.com/tehanaliz
Fundamental is the simplest and therefore so beloved by novice traders method of analyzing the Forex market; it is based on the study of external factors that influence exchange rates.
The main source of fundamental analysis data is the economic calendar of events and the news feed in your trading terminal; you can also receive information from almost any source - newspapers, magazines, Internet news sites.
The main thing is that you can correctly use the information received in your trading, there is nothing complicated here, you just need to establish the relationship that exists between the event and the currency.
For example, the Bank of Japan intervened in the foreign exchange market, which means that the supply of the Japanese yen has increased, and Forex will definitely react to this event with a fall in its exchange rate.
The only negative point when choosing this method is that the exchange rate does not always react adequately to a particular event. Therefore, as in previous cases, signal confirmation should be obtained.
All about fundamental analysis - http://time-forex.com/fundamental
Intuitive - based on intuition and assumptions, this type of analysis has recently appeared; it is most often used by traders with extensive practical experience. They don’t just guess the trend, but base their guesses on the basis of subconscious analysis and knowledge of the patterns of behavior of the price of the selected asset.
Forex market analysis - serves as a source for obtaining data on the basis of which one can assume where the price of the selected currency pair will go.
Without this, you will open trades at random and close without receiving any possible profit. Market research is one of the integral components of successful trading.