What is asset understanding and why is this aspect important when trading on the stock exchange?

One of the components of successful trading on the stock exchange is the correct choice of asset for which transactions will be made.

Most novice traders don't give this question much thought, relying more on intuition and ultimately choosing currency pairs or stocks of popular companies. 

But the best results come from trading an asset that you understand and know what influences its price the most.

Yes, if you want, you can base your work solely on technical analysis data, but if you trade not only intraday, then fundamental analysis will help significantly improve trading efficiency.

What is the understanding of a stock exchange asset?

First of all, it is knowledge of what influences supply and demand, and what significance this has for the price of the chosen asset.

For example, you know which data releases affect the euro's exchange rate against the dollar, so you choose to trade the EURUSD currency pair. Factors Affecting Exchange Rates 

Finding information on events that affect the euro and US dollar exchange rates is quite simple, which is why most beginners choose to trade this asset.

A similar example can be given with futures trading . To determine the trend in advance, one must know which events influence a particular commodity. For example, the price of wheat on global markets is influenced by crop yields and the geopolitical situation. If the supply of this commodity is insufficient, then the price will naturally rise.

The stock market is even more complex, as not only financial reports and dividend announcements play a role, but also the performance of the company whose shares you're buying. For successful stock trading, it's advisable to have at least a basic understanding of financial analysis, which will help you assess the true value of shares.

People often succeed in the stock market by choosing assets that are close to their profession. This allows them to quickly assess the situation and identify news that influences the trend.

If you can't find any assets related to your profession, simply focus your attention on a specific instrument from the trading platform. After a while, you will gain experience and begin to notice patterns in price behavior .

Many beginners, after trying their hand at trading one asset and failing, immediately switch to another. However, this only harms their performance. It's better to analyze your mistakes and try to avoid them in the future.

Not everything about an asset can be learned from stock exchange books and articles; many aspects must be discovered during the trading process itself.

Popular assets on the MT trading platform - https://time-forex.com/vopros/chem-torguyut-na-foreks