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The best way to unearth winning forex trades

by , 18 November 2015

If you want to start forex trading, you'll need a strategy to help you find winning trades.

With forex trading, there is one strategy that will help you do this. This is technical analysis.

So what is technical analysis? And why does it work so well with forex trading?

Let's take a closer look…


What is technical analysis?

 
Technical analysis is about trying to predict price movements and trends by looking at what’s happened in the past using charts.
 
For a forex trader, technical analysis is an invaluable resource. Once you understand the main principles you can apply them to whichever currency pairs you trade. You may also find it useful if you trade other assets too.
 

Why technical analysis works so well with forex trading 

 
Technical analysis works really well with forex trading as the market tends to follow strong trends. This makes the most of technical analysis.
 
You can use it on just one currency pair or a number of currency pairs when you trade.
 
The success of technical analysis with forex trading comes down to three things…
 
#1: The forex market prices everything in
The forex market prices in what’s going on. This includes economic fundamentals, supply and demand, market sentiment, and political factors.
 
Technical analysis focuses simply on price movements.
 
#2: The forex market moves in well-defined trends
A trend will continue in the forex market until it reverses. This means trading with the trend is a great way to profit from the forex market.
 
 
 

 
 
#3: The forex market repeats patterns
Consistently, the forex market repeats patterns over the decades. Once you are familiar with these patterns, you can work out what the next move for a currency is.
 
This means you can exploit the market for profits and protect yourself against the downside.
 
So there you have it. The best way to unearth winning forex trades.
 
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The best way to unearth winning forex trades
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