They believe the stories which are spread online with the help of the internet marketer for the promotion of FX. Day-dreaming begins their mind, and they fantasize to be millionaires. But, everything seems to disappear from their mind when they come to the real battlefield of Forex trading and find themselves very naive.
Proven Research Methods for Forex:
- Fundamental analysis
This research process mainly depends on the social, economic, and political situation globally. Doing the fundamental research an investor may easily understand whether she has to execute the trades now or wait for the best opportunity. In the Forex market, the experts in the United Kingdom always give emphasis to economic events. Since high impact news is often considered as the price driving catalyst, ignoring the role of economic events is more like trading the market with emotions.
The unemployment rate of a Country may affect the total GDP of a country badly and when this happens the investors get reluctant to invest. The economic growth will be slowed down if a great amount of investment is not maintained inside the region. This may affect the currency of that specific country too and the value of the currency may take the downtrend. When this type of incident occurs, traders should not execute their trades against the currency of that certain country to reduce the possibility of the loss to a greater extent.
Political turmoil may make the business opportunity of a specific region stagnant as the investors do not guess what the upcoming condition will be when the government will be shifted. It is often found that the new government changes the business policy with new types of rules and regulations regarding taxation.
The social condition of a certain region may also affect the currency which may keep a bigger effect on the trading platform indirectly. When movements regarding racism or religions occur, the economy of that country can undergo a huge change. Recently, the boycott against the French products by the Muslim country has kept a deep impact on the financial sustenance of the France government. To survive in the market the government of that country is working but hardly getting any outcome. CFP Franc got a great deal of decrease in the value and as this country also uses Euro as its currency, we found a great change in the FX trading during that certain time.
- Technical Analysis
Besides the fundamental analysis of technical analysis works greatly to predict the market. It indicates the utilization of the chart with the help of financial indicators. Experts only use the indicator they need most and remove other distracting elements from the graph to get clear data about the current market.
The graph is the visual representation that shows the present condition of the market with continuous movement of the moving average. We may see the support and the resistance level clearly to execute the trades online.
To the bottom line, it can be referred that without proper analysis of the current market condition it will be impossible for the investors to make a greater amount of profit. To increase performance, conducting continuous research has not alternative.
Image credit - 1, 2