The trader always has the choice. Buy or bye, sell, or neither so flat. The trader doesn’t necessarily have to do something. Waiting often brings more. But if something does, what is the right decision? Sell or buy? This question is to be investigated in the following article. But beware! The article can only provide food for thought.
Coincidence or strategy?
One or the other trader decides on a random basis. A strategy that often goes wrong. Trading in foreign exchange is too complex for this. The trader is given signals when a trade is worthwhile. The trader must learn to interpret such signs from the economy and politics correctly and respond more quickly than the other market participants. For this, the trader needs a strategy – his strategy. Selling or buying will then be easier to decide.
The means to the end
In forex trading, three funds have emerged which allow the trader to develop a well fundamentally trading strategy and to make tactically correct decisions. These are the tracking of current news and the two basic analysis types. Fundamental analysis deals with influencing factors that trigger the imbalance between supply and demand. These are basic data from the national economy. The technical analysis focuses on historical developments in the exchange rate of currency pairs. The traders are now trying to deduce the future development from the historical development. The combination of these three means is reflected in the trading strategy.
What does the beginner do?
The newbie on the market needs tips. It is advisable to first look at what experienced traders are doing. It should be guided by basic trends. He can collect information about the market sentiment. Above all, the volumes used per trade should be very low and the beginner must concentrate on a currency pair. Each of the starts needs experiences and he can collect the demo account, but he also has to trade live, because otherwise he does not learn to control the psychological factor of foreign exchange trading. Psychology is important. The trader must learn to get his emotions under control.
Benefits of technical Analysis
Technical analysis is often used to identify entry and exit levels. This will focus on trend-following systems. The reason for this is that action against the trend would mean stemming from the market, which is likely to go wrong with the mass of market participants and the volumes traded. Indicators and oscillators are used. An indicator is, for example, the price. The oscillator would be a change of course. With the use of various indicators and oscillators, one should never forget that all these instruments are purely relief measures or snapshots and you are not allowed to rely completely on them. The goal is to work out trade signals and then use them in tactical decisions.
Sell or buy – the decision
The successful trader waits until it turns out what 90 percent of all other market participants are doing. He makes himself the trend to his friend. He does not forget to put a stop loss under the resistance and a take profit. According to his money management, he will leave the amount of capital invested in a disciplined manner at a low value. If there is no clear market situation, then it simply does nothing.Advertisement