Forex Forecast traders for 2019
In order to increase the chances of success, Forex traders need to predict the trend on Forex to determine the movement of a currency and make the right decision at the right time.
How to predict the trend on Forex
Many traders are asking this question and trying to make a forecast of currency pairs. This is not easy to do and you can’t make a profit on Forex every time, but you can use techniques to predict currency pairs to improve your trading decisions.
In this article, we will look at the different approaches to making a Forex forecast, the fundamental and technical indicators to be used and the trading software that can be used to predict trends in Forex and, for example, a forecast of the evolution of the euro dollar.
Being able to analyze and predict trends in Forex is one of the essential skills that a Forex trader must possess.
The trend is the general direction of the price of an asset or financial market. Trends may vary depending on their duration:
In the context of a good trading strategy, you have to know.
What is a Forex trend?
How to interpret it
How to anticipate
A trend can also be applied to the interest rate. Sometimes a good trader who anticipates the interest rate trend will be able to anticipate the movement of the currency price.
Trading against the trend with high leverage can make you lose a lot of money, so beware of the market trend.
5 Factors of Real-Time Forex Analysis
The psychology of the trader
Forex Technical Analysis
Fundamental market analysis
From a fundamental point of view, there are 5 factors that have a direct impact on exchange rates and that can help you anticipate the currency trend and forecast the evolution of the euro:
Geopolitics or political stability.
Imports and exports
Whether you’re trading, both long and short term, it’s important to have an overview of the fundamental factors that influence the currency pair you want to trade.
For that, it may be interesting to consult the economic calendar and learn how to operate with the economic calendar.
Fundamental analysis to predict Forex
Forex’s fundamental analysis focuses on several different fundamental factors, such as:
GDP (Gross Domestic Product)
All this information is available in the economic calendar. On each Forex broker’s website, you will usually find an economic calendar that publishes in real time the news expected by the markets. These ads may be more or less important and vary depending on their impact on the chosen currency pair.
For example, let’s look at how to trade the euro dollar.
To forecast the evolution of the euro, it will be necessary to look at the economic news of the euro area and the United States.
For example, the publication of the NFP, the Non Farm Payroll report, has a significant impact on the euro market and, as a result of this data, you can get an idea of the underlying trend in this currency pair.
The same principle can be applied to the publication of GDP, inflation figures and economic growth.
If we have good GDP figures in Europe and good economic growth, we can anticipate an increase in the price of the euro against other currencies.
In addition, the same principle of fundamental analysis applies to stock market indices, such as CAC 40 and DAX 30. For indices, anticipating the stock market trend is generally a little simpler than on the forex market, because a good result on the ZEW indicator in Germany affects the price of the DAX 30 more directly than in the euro dollar.
In the foreign exchange market, we must understand that, from a fundamental point of view, we have two economies face to face: the European economy and the US economy.
Here are some other economic indicators available in the trading calendar.
The employment situation
The budget and trade balance.
Traditionally, when a certain country raises its interest rate, its currency will appreciate due to the fact that investors will exchange their assets and invest more in that currency, so they will buy more.
Interest rate is really the most important factor in determining the price of a currency and, if you want to make a good forex forecast, you should follow the announcements about ECB rates or The Minutes of the Federal Reserve. .
Significant decreases in payroll employment are a warning sign of weak economic activity that can ultimately lead to lower interest rates. This can have a negative impact on currency pairs.
A country with a large trade deficit will probably have a weak currency.
GDP is a key indicator of the strength of economic activity. There is a link between rising GDP and the possibility of an increase in interest rates, which are positive for the currency in question.
How can a trader use all of the above points to make a Forex forecast?
First, always follow the economic calendar.
You will also need to have at least some basic concepts of technical analysis and Price Action.
Fundamental analysis alone can help you predict trends in Forex, but you should combine it with technical analysis to better find the moment of entry into a position.
Forex Forecast – Technical Analysis
The essence of technical analysis is that it tries to predict Forex movements by looking at past market data, especially prices.
The idea is that history repeats itself in financial markets and that the trader can identify predictable patterns. In turn, these models, produced by Price Action, are called trading signals.
This is the purpose of technical analysis: to discover the current market signals by comparing them to the previous signals.
Technical analysis can help traders predict currency pairs. Knowing at least the basics of technical analysis can be useful for the trader: support and resistance and some technical indicators and graphic figures, such as shoulder – head – shoulder.
Technical analysts believe that price fluctuations are not random and ununpredictable. Once a certain type of trend is established, it will continue for a while.
Technical analysis can help you identify the trend and strength and stability of it over time.
Technical analysis can increase discipline and decrease the influence of emotions on your trading plan. While no system can guarantee 100% Forex forecast, technical analysis can help you create a trading plan and track more objectively.
Forex Forecast Indicator
Now let’s see how to predict the Forex market using technical indicators.