Forex is oftentimes touted as a big earner option to anyone wanting to make money in no time with a little investment and no effort whatsoever. While this perception is partially truthful, the fact is that spread betting and currency trading involve a risk to some extent, and similarly to other investments in volatile markets, there is no guarantee that the money you are going to invest will generate profits, it could be lost or, in the worst case scenario, you might end up with a margin of extra liability for money due.
The good news is that the chances to win money with Forex is greater than the potential risk involved, particularly when the trader knows exactly what to do and how to do it. Yes, understanding the Technical Analysis of the currency trends, and some other indicators, is absolutely necessary. These reveal what time is the moment to buy certain currencies, and what other time is ideal for selling some others. This is the wise way to go for the serious trader willing to build wealth on the Foreign Currency Exchange market or similar type of spread betting opportunities across multiple financial markets.
Your First Footsteps into Trading
To be a successful Forex trader, you need to understand the basics of Technical Analysis (T.A.) and learn how prices of currencies will go up and down, doing then the right trading move. Doing this is truly easy because Technical Analysis utilizes numbers to represent the impact and variation on currency’s prices, valuable information that contributes to predicting the trends on the Foreign Currency Exchange market. Moreover, these numbers eventually can be indicators of repetitive trends that also reflect themselves into a new Technical Analysis, hence raising awareness of traders to trade the right currencies in the right moment.
However, you must keep in mind these key points to improve your trading skills:
- Certainty of knowing the direction where the market goes contribute to making the right decisions
- Technical Analysis and trading indicators improve emotional control during currency fluctuations
- You will also be able to move forward to the most profitable deals, rather than focusing on low entry points.
Discovering that a currency is going up can trigger your emotional response and make you buying it blindly, but a Technical Analysis can reveal an ephemeral value raise that can make you lose money; this is why you must keep your emotions under control. Technical Analysis is the foundation stone for the wealthy traders that put their spread betting into market indicators, not simply in lucky hunches. In Forex trading, you will usually be following at least a currency pair, which might be part of the Technical Analysis trend, but the determining factor for profits is watching over the price.
The Ups and Downs of Forex Trading
When a trend goes high, but the price goes below the previous indicator you had, move yourself across and follow a different path. If price goes below the indicator, this fluctuation may only be good if you are going to buy currencies, but not if you are trying to sell yours out. Remember that Forex is a dynamic market that is never closed and therefore you must follow promising trends and indicators in the Technical Analysis, even if your investment is placed through a spread betting service to get the price movement covered in its wide range of tax-free investment options including currencies, shares, commodities, indices and else.
So with that said, pay attention to the market indicators; the moving averages will give you the price or your pairs at a given point throughout a previously defined period of intervals. The resulting indicator is the actual price, which is the base that has been calculated using the measuring time of the intervals. It is advisable to set short average intervals when calculating this indicator, because larger figures do not only tend to lag the market, but shorter terms allow you to detect the moving averages easier to make your buying and selling projections.
Similarly, other indicators will help you to round and shape your Forex trading decisions, including the use of the
- Bollinger Bands that analyzes the flow of prices,
- RSI Relative Strength Index that measures the market activity
- Fibonacci Retracement level, which reveals to you how the price climbing may produce after the original movement.
Successful Forex and spread betting traders make use of several signals produced by Technical Analysis and its associated indicators to produce wealth.
Investing in Forex can truly make you rich, but make sure to understand what you are doing, or let an expert in the field teach you, if not at least get a coach along the way. Working from a Forex platform where you can open an account and get further assistance certainly will also help you to pave the road to financial success.