In fact, trading Forex is like a forecast. Currency does not change randomly. Instead, it changes in a predetermined way that is determined by market demand. Therefore, trade is not impossible provided the research and experience are carried out properly.
There are two main ways of predicting currency when trading currencies. First, technical indicators, second, market analysis based on economic and news. Both must be done at the same time.
Beginners can only forecast based on a technical analysis, but advanced traders must forecast based on heard news related to trends in the economy.
Technical analysis is a smart way to predict currency change based on mathematical formulas. Users may not need to know the mathematical details associated with this type of analysis. They only need to know how these metrics are used properly.
For example, for stochastic indicators, this way of predicting currency change means to see if the indicator number will be very low or very high for a relatively long period. In this case, a trade event occurs and the trader can buy or sell the currency being traded.
On the other hand, economic analysis is used to predict currency fluctuations based on the financial position of the country owning the currency being traded. It depends on the industrial level of the country and also on the political situation of the country. For example, if a country is at war, it will affect the value of that country's currency.
As mentioned above, this type of analysis needs advanced marketers to use it. The technical indicators and even not all of them are simpler, as some indicators can be difficult to use.
A forex trading strategy is a way to predict currency change based on a combination of technical indicators and news analysis. For example, a Forex strategy may have two technical indicators, such as stochastic and MACD, and do not include news analysis in the strategy.
For a more successful strategy, the trader should use a smaller amount of simplicity indicator, as a general rule, simpler equal, and more successful. This applies to many areas of our lives, not just Forex trading.
Predicting a currency change in a simpler way will give you a rough idea to help you decide to buy or sell now. The ability to forecast well for a currency change is the key to trading success. In other words, failing to predict how the currency becomes, it leads to a failure in trade and leads to losses.