Foreign exchange market analytics: accurate forecasts

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The currency market itself was originally created to ensure banking operations between different countries. Forex is a market, or rather, one of its components, enabling traders to make a profit by selling and buying currencies.

Like any market, Forex is a clear mechanism that obeys its own rules and laws. The trader's task is to predict the price movement for a particular currency pair.

What affects price changes

Different factors influence quotes. There are a number of activities that experienced traders use to analyze in which direction the price will move. Currency market analytics and forecast is one of these tools.

Various events are constantly taking place in the world that affect the movement of market prices. The market can be very tangibly pushed in one direction or another and the speeches of bank executives and well-known politicians, and the forecasts of gurus andexperts of the foreign exchange sea market.

Often such information is disseminated specifically to weaken, strengthen or put pressure on some currency.

Stock analytics

A lot of analysts work on financial exchanges, who regularly publish their analytics of the foreign exchange market. Accurate forecasts do not always happen, and they are usually based on available data on the international situation, economic calculations and trends, as well as on a variety of trading indicators.

The profession of a stock analyst has recently become quite in demand. Such specialists process various data and information available to them, make invisible connections between them and make their own forecasts. Of course, their statements are not unfounded and often turn out to be true, however, so that thoughtless trust and following others does not turn into a loss of capital for a trader, one should, in addition to studying analysts' forecasts, rely on their own knowledge and try to make their own forecasts.

Analysts are not always right and there are often situations when, due to incorrect interpretation of available information by stock analysts, traders go the wrong way. And sometimes this is done intentionally, in order to influence a certain currency pair.

There is a saying among professionals involved in Forex market analysts: "If you don't know what to say, say that the current trend will not change and will continue." This says a lot… Therefore, in order to trade profitably and withoutunreasonable risks, each trader is simply obliged to learn how to make his own forecasts and build trading with them in mind.

Thus, traders are advised to treat analysts' forecasts as some kind of trading signals, but make deals only by listening to them, but relying on their own conclusions.

Forex analytics

When compiling analytics and forecasts of the Forex currency market, a comprehensive analysis is used. That is, everything that is possible - trends that have developed in the global community, market events and news, signals, indicators, trends, fundamental knowledge and technical analysis data. All these indicators have clear links with each other. Stock exchange news should not be neglected when analyzing the Forex market. This is also very important.

Forex market analysis consists of several parts:

1. Technical - based on mathematical and statistical data. It is compiled according to its own strict rules, where the basis is the history of price fluctuations. These are various trading patterns, trendlines, charts and signals.
2. Fundamental - this is analytics of political and economic events, some other aspects of public life that can influence quotes.
3. Fractal is a relatively new direction in determining future Forex price fluctuations. The meaning of fractal analysis is that they proceed from the postulate that the future price depends on its past values. The famous trader Bill Williams used this method in his trading and achieveddizzying success. The corresponding indicators are included in the Metatrader trading terminal.
4. Wave - this method is more complicated than the others and is based on Elliot waves, which make it possible to predict fairly accurate marks for entering and entering the market, predict a trend change in the near future, and also assume the duration of the existing price movement. Many traders consider this method the most powerful and promising.

Which of the methods of analysis to use and what to pay attention to to a greater extent - everyone decides for himself, since, as you know, a trader trades at his own peril and risk.

Types of analytics

• From 1 day to 1 week - short-term analytics. Most analysts publish their forecasts before the start of the trading day. This helps to determine the most profitable points for entering and entering the market, to follow the trend. Fundamental calculations in such forecasts are almost not taken into account.
• From 1 week to 1 month - medium-term analytics. This is a collection of information about what important events took place in the political and economic arena during this period, as major financiers made statements, and which banks held meetings. Based on all this information, along with technical analytics, traders usually make most of their decisions.
• From 1 month to 1 year and longer - long-term analytics.

Traders usually focus on those Forex currency market analytics, accurate forecasts made on which come truemost often. Everyone chooses the one that best suits their chosen trading strategy.

Analytics reviews. How to interpret information correctly

Finding various information about events in the world is not difficult. It is much more difficult to understand it correctly and interpret it accordingly, in relation to trading on the stock exchange.

First of all, the current currency market analytics is located in the trading terminal, which is used by all traders. These are charts, indicators - their analysis helps to understand the trends of the trading trend. In addition, each professional trader develops his own trading strategy, which, together with a set of various tools, helps them make the right decisions during the trading session.

On the websites of brokers there are always sections that contain currency market analytics from full-time analysts and various tips on working with indicators and signals.

Where else to look for information

Where to look? Among:

• stock brokers;
• portals dedicated to the economy;
• analytical organizations and institutions;
• experts.

Do not neglect the print media, they publish a lot of useful information for the trader. Regular viewing of popular Internet resources in the "Economy" section, visits to thematic portals about Forex trading. It is not at all necessary for a novice trader to be an analytics guru, even without knowing the intricacies of stock trading, sometimes it is enough just to notice something in time orpay attention to someone's professional opinions or new trends.

When doing currency market analytics and making your own quote forecasts, you must first learn the terminology, understand what indicators affect the movement of prices on the stock exchange.

There are basic, sometimes obvious facts that lead to the growth or fall of the national currency. Any negative in the state leads to a weakening of the currency.

The better a trader understands what events (or, conversely, what events that did not occur) can affect the prices of the foreign exchange market, the better his trading progresses, and the more chances he has to receive regular profits, and not lose his money.

Using analytics in trading

When analyzing the foreign exchange market in a given situation or currency pair, you should definitely listen to the opinion of professionals, but you should draw conclusions only on your own, carefully comparing all known facts, and never completely trust someone else's opinion. Only then will it be possible to achieve success.

To understand how to use analytical forecasts and data when trading, you can consider a simple example.

USD/JPY trading

Cost of the pair at 112.80.

After examining the price movement chart for this currency pair, it is clear that the price for it has fallen over the past week by more than 300 points. But that's not enough.

A meeting of the Bank of Japan is scheduled for next week. Issues of credit policy will be considered. Based on the results of this meeting, it will be possible to understand what awaits the currency pair.

How a forecast is made

1. Since Japan is a country whose economic aspirations are focused on export, the competitiveness of goods is accordingly important.

This means that the increase in the price of the state currency is not desirable. This suggests that, most likely, the value of JPY should not increase.

2. After conducting a technical analysis, we can conclude that the support for the pair is at this level, which means that the price can bounce off it and go up.

So, a trader, having various information for currency market analytics, gets a chance to make a profit by trading on this pair.