Being a Forex investor doesn’t only mean you will put some money on the counter and in return, you will get profit. You need to do a little more than just exchange your money. That ‘little more’ is engaging in technical analysis. There are millions of Forex participants out there. So, if you think you can make money here without having any competition, then you are wrong. There may be times when you would find a deal very amusing, but someone else might snatch it from you before you even decide to get involved.
That’s why you also need to be tactful enough to survive in this industry. Keep in mind that the rule, ‘Survival of the fittest’ prevails here too. That means that the more skilled you are, the higher your chance is of surviving and making money. But as a novice trader in the Mena region, you might find it hard to gain skills. Those skills often require practice to be shunned. For that reason, you need some weapons to wield. In this platform, your biggest weapons are the charts, trendlines, economic indicators, etc.
For example, if you can read the currency correlations, you will be able to predict the probable changes of currency pair if the value of any correlated currency pair changes. Therefore, there is no way to look down on technical analysis when you are in currency investment. Another thing you need to keep in mind that most traders fail to make money here due to improper application of methodology. So, before you gear up to join this game, you need to check first if your basic skills and analysis is good or not.
Looking only at the charts will not help you
You might be looking at your charts for hours but still cannot find a good opportunity to make a nice profit. This is because looking at the chart will only show you the price changes that took place. To execute your trade, you don’t only need the price changes but you also need to speculate to help you understand when to enter a trade. Visit this link and you will find many useful resources at Saxo. It will enhance your knowledge and allow you to think outside the box.
If you are not creative enough to see how the market movement might change in upcoming days then making a profit here will be a hard deal for you. besides looking at the charts, you need to know how to draw trends. Drawing trendlines is an important aspect to assume the price movement. To draw some trendlines, you need to look at the past and observe what previous trends looked like in the market.
This will also help you to draw proper resistance and support lines. When you can draw resistance and support lines perfectly, you will be able to observe breakouts in trends. Whenever the price movement crosses a resistance or support line, it indicates a probable breakout. Again, there may be some fake-outs in the disguise of breakouts. Using indicators like trend confirmation tools etc. can help you to distinguish fake-outs from breakouts.
Another important thing that you need to understand is fundamental analysis. Technical analysis is the most prioritized part of analysis, but fundament analysis is no less important. This includes looking at several economic indicators. You will have to look at the news releases of the national bank, CPI, FOMC decisions to know the most likely price changes that will take place in the future.
Besides that, you will also need to keep an eye on economic indicators like GDP and the budget to have a good idea of how the economic changes can affect the currency market. Reading about and analyzing these sectors will also help you to understand the market more and help you to get comfortable with the changing nature of the market.
Now, the skill you require to analyze all the information about this industry might not come to you from the very beginning. But you should keep in mind that consistency, practice, and patience can help you to develop your skill and reach your goals.