Some investors say that the key to profitable trades is timing the market. You can’t time the market with a 100 percent precision. But, you can predict current and upcoming trends.
If you’ve been trading Forex for a while, you know that making accurate predictions of these trends help you hit it out of the ballpark. How are your current Forex predictions? Are you making the right ones?
A good place to start is looking at the last year forex trends and see how they affect the market this year. That’s why we’re going to discuss how to make accurate predictions. Read on to learn more!
Forex Trends: How To Get Ready For 2018
To become a successful trader, you must be able to identify the market trends. This isn’t easy but, not impossible. If you know how to spot the signs, you’ll be making profitable trades all year long.
The forex market works differently from other markets such as the stock market. That’s why there isn’t a one size fits all formula when it comes to forex predictions. When you analyze the forex market, you’ve to look at the bigger picture.
How to Make Accurate Forex Predictions for 2018?
To make accurate predictions, you should conduct a technical and fundamental analysis. During your technical analysis, you’ll be looking at data such as price to analyze the movements of a currency pair. You’ll be using this data to identify patterns.
These patterns will help you predict future price movements in the future. This type of analysis establishes that a currency pair trades in a specific range or trend. According to technical analysis, the patterns you find will repeat themselves.
Some of the technical indicators used are moving averages, trends, double tops and double bottoms, among others. One of the most popular lagging indicators is moving averages. This indicator measures the price movements of a currency during a specific period.
To calculate the moving average of a currency, you would add the prices at closing for the currency during the period. The results are added to a price chart.
This analysis allows the trader to see the trend in the price action of the currency. This way they don’t have to focus on daily price fluctuations that can be inaccurate to make solid forex predictions.
When you use fundamental analysis to make your forex predictions, you’ll take a look at the big picture. You’ll analyze the economy, politics, among other essential factors. During this analysis, you’ll study geopolitical and economic events that affect the forex market.
Rise in interest rates, changes in the Gross Domestic Product, manufacturing, among other events can change currency prices and trends. An example is how the rise in interest rates in the United States is expected to strengthen the US currency.
Wrapping It Up
Making profitable trades will depend on the forex trends. That’s why you must make accurate forex predictions. Remember that not all currency pairs are the same.
So when you’re making your predictions, you should keep in mind its past behavior. Every trader has their process. You must base your predictions on your analysis.
You shouldn’t have a one size fits all approach. Accurate forex predictions are the result of well researched and thorough analyses.
Want to keep improving your forex predictions? Check our blog to learn more about how to gain more success in trading forex.