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Being a successful trader in Forex is about the same thing as being a successful trader in general:
being able to tell in which direction the price of your assets is going.
Therefore, any trader worth his gains must have the skill to forecast where their currency pairs are going.
The concept has its own tools and steps for being successful at it, but you needn’t worry since that’s exactly why we’re here today, to teach you what you need to do just that
1. Types Of Analysis
There are three types: fundamental, technical, and sentiment analysis.
They don’t have to be three separate tools but three parts of the same: fundamental analysis studies events and tells you the long-term direction of your currency based on the news, technical analysis studies the price movement itself, and sentiment analysis measures the enthusiasm of other traders at the moment.
2. Using The Right Chart
Make sure you feel comfortable with what you see; it doesn’t matter if you prefer candlesticks or renko bars as long as you’re able to look at the chart and understand it.
3. Each Approach Has Its Time
Don’t use a weekly chart for short-term trading, but don’t overload yourself with information by using a minute chart for taking a month-long position. Know which timeframe is better for your approach.
4. Identifying Trends
Look at your charts and look; did the price move 7 times upwards and 2 small reversals downwards? Then you’re probably looking at an uptrend.
Use trendlines and practice since this is necessary.
5. Price Action Patterns
Do you know what’s a double top? How about a head and shoulders? Cup and a handle?
Traders have specific behaviours that tend to repeat themselves with time, and your charts do tell you that if you know what to look for.
There are specific forms and patterns that give suggestions regarding what can happen next, so ensure you can spot them.
6. Measuring Momentum
Realise the strength of the trend!
You don’t want to open a BUY position at the last couple of candles before a huge downfall in price. Quite the opposite, you want to be able to ride the trend while it’s at its strongest and not when it’s dying.
Look at the size of the candles or use an indicator!
7. Knowing Your Indicators
Speaking of which, understand what you’re using.
There’s not a reason for you to use five different indicators if you only understand two, so just use what’s necessary and what you comprehend. Sometimes, less is much, much more.
8. Having A Trustworthy Source Of Information
The most important part of trading is having a source for news and analyses that you can trust with your eyes closed. There are no benefits when you know each indicator and can fully comprehend your charts if the data you’re receiving is incorrect.
Therefore, take your time deciding which source you use and choose something like FX Trading
Revolution, so you can have the latest and most accurate information and details regarding the
Forex market!
