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How to predict the exchange rates?
2022-11-23 • Updated
It’s time for action! You learned how to open and close trading orders In Metatrader. Now you are ready to trade on the Forex market. But how to decide what to do – buy or sell? Is there an answer?
Luckily there is! You buy a currency if you think that its exchange rate will rise in the future and you sell it if you predict its price to decline.
To make such a forecast, you need to look at two things – a chart in Metatrader and an economic calendar. Below you will find a quick guide on how to analyze the Forex market and trade with profit.
How to earn with the help of fundamental analysis?
Fundamental analysis doesn’t mean that you will have to do a hard and exhausting job. Fundamental simply means ‘economic’. If an economy is doing fine, all things equal, its currency will appreciate.
To make a forecast about the future value of the EUR versus the USD, we need to compare the economies of the eurozone and the United States: whichever is doing better, that currency will strengthen. For example, imagine that the European economy rose by 0.5%, while the US economy increased by 2% during the same period. The strength is clearly on the side of the US, so traders will expect the EUR to decline versus the USD. To make money on this decline, they will sell EUR/USD.
Every day the world’s most important countries release their economic statistics. You can find the calendar of these releases, the forecasts for them and the actual figures in the economic calendar. If you check it regularly, you will get a lot of great trade ideas.
Have a look! On May 23, 2018, a British indicator came out below the forecast, while the US figures were fine. As a result, GBP/USD declined during that day. You could have opened a sell trade and earned money!
How to make money using technical analysis
Technical analysis is also simpler than it sounds. It doesn’t require the knowledge of math or mechanics. All you need to do is to draw lines and watch the indicators – the same way that you look at your car’s speed gauge.
The main principle is that you buy at low levels and sell at high levels. Moreover, a trend is your friend. A trend is when a chart moves in one direction – up or down – for a considerable time. Traders buy during an uptrend and sell during a downtrend. An uptrend is a situation when the price constantly sets higher lows and higher highs. A downtrend is when the price forms a series of lower highs and lows. Below you can see an example of a downtrend.
Notice that traders usually connect chart highs and lows by the so-called trendlines as we did at this picture. You can tell that it’s a downtrend when you connect two highs with a descending line (points 1 and 2). Technical analysis allows you to expect that the next time the price comes to this line (point 3), it will reverse down and you will be able to sell. You will be able to close your trade at points 4 or 5.
This is just one of the techniques you can use. To have even more options for gaining, check our tutorials.
What type of analysis to use?
The logical question now is when to use fundamental and when to use technical analysis. Some traders are trading only on economic news, while others feel that they need only the price chart for success. Both types of analysis have their advantages. There’s also an opportunity to take the best out of both methods: choose to buy or sell with the help of economic analysis and then determine the optimal level to enter your trade with MetaTrader technical tools. This way you will double your chances of profit!
According to coinmarketcap.com, there are more than 9250 different cryptocurrencies. And those are registered ones, with twice as much hidden from view. An article describing them would take a year to read and won’t make any sense as half of these cryptocurrencies are already inactive.
Trading has several levels of complexity, starting from the easiest, like buying and selling random assets, to a more comprehensive one, with deliberate risk management, timing, and objectives.
How to withdraw the money you earned with FBS?
The procedure is very straightforward. Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.
How to open an FBS account?
Click the ‘Open account’ button on our website and proceed to the Personal Area. Before you can start trading, pass a profile verification. Confirm your email and phone number, get your ID verified. This procedure guarantees the safety of your funds and identity. Once you are done with all the checks, go to the preferred trading platform, and start trading.
How to start trading?
If you are 18+ years old, you can join FBS and begin your FX journey. To trade, you need a brokerage account and sufficient knowledge on how assets behave in the financial markets. Start with studying the basics with our free educational materials and creating an FBS account. You may want to test the environment with virtual money with a Demo account. Once you are ready, enter the real market and trade to succeed.
How to activate Level Up Bonus?
Open Level Up Bonus account in web or mobile version of FBS Personal Area and get up to $140 free to your account.