How to play forex, namely to build forecasts on it? This is actually not so difficult. The forex game is carried out using various techniques. The greatest prevalence of them by state today has received technical as well as fundamental analysis. In addition to these standard methods, there are also exotic ones, like astrological forecasting, fortune telling on maps, etc. And these are not jokes at all. Similar techniques are actually used by some when making forecasts of changes in the currency rate at Forex. It is difficult to say anything about their success and effectiveness. Therefore, it is the methods that are more or less scientifically substantiated that are much more popular.
How to play forex using fundamental analysis? This type of analysis implies the study of a variety of basic indicators of the economies of those countries or regions whose currencies are analyzed. These indicators include:
- billing and trade balances states;
- indicators characterizing the financial markets of states, as well as stock indices;
- indicators characterizing macroeconomic development, namely the demand for cars, real estate, levels of employment, production, prices;
- interest rates of banks, the volume of money supply in the country, that is, indicators of regulation of the state economy.
All these factors to some extent exert their influence on the exchange rate. Therefore, by analyzing them you can better imagine how to play forex. For using fundamental analysis in the foreign exchange market, it would be nice to have a complete higher economic education. Nevertheless, even without such a learning to predict, it is quite possible, having the necessary reserves of patience. After all, the necessary literature is quite enough, and it can help. And even if, for example, you are just too lazy to study fundamental analysis, you should not be sad. After all, others have long been doing this for you. And you can take advantage of other people's fruits in your own work. Indeed, most of the dealing centers present their users daily detailed market analyzes with forecasts of the development of the situation in the very near future. And if your dealing center doesn’t please you, look on the Internet for the necessary information.
How to play forex using technical analysis? This analysis is deservedly considered simpler than fundamental. It is based on theories that the situation that prevailed at the moment, already existed in the past, that is, it has absolute analogues. In short, when studying market behavior after a similar situation, you can determine what will happen in the future. Technical analysis has the following postulates:
- everything is taken into account in the market. That is, each reason for the change in the exchange rate, considered by fundamental analysis, is already taken into account by the market. Therefore, the most important is the study of the dynamics of exchange rates;
- Prices move according to some trends. This suggests that at certain times, certain types of course behavior are formed, whether in place, up or down. Such forms of behavior are called trends and, accordingly, are upward (with an increase in the rate), downward (with a fall) and lateral (without significant changes).
Having studied the described methods of analyzing foreign exchange markets in conjunction with each other, you have a much greater chance of answering yourself the question of how to play forex.
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