Previously on how Forex works we talked about the basics of Forex Trading and highlighted legit brokers worth joining as a newbie Forex Trader.
In a simple trading language we explained how Forex happens, on what conditions and when.
Trusting that you registered with a broker of your choice and got the new account bonus; we today move to the next subtopics which are just as important as knowing how Forex works.
In this follow up guide be ready to learn: –
1. How Forex Fundamental Analysis is Done
2. When & where to Pick Forex Trading Signals
3. Why Forex Trading Tools and Softwares are important.
#1. What is Forex Fundamental Analysis?
Fundamental analysis is a way of looking at the Forex market by analyzing economic, social, and political forces that may affect the supply and demand of an asset.
As per our example on how Forex Works (Read When you find time); when you cross the border to Uganda and convert KES to UGX.
We saw that the cost of acquiring Ugandan money. became cheaper or more expensive if there was high supply of Ugandan money than demand and Vice versa.
Assuming you analyze the market with these observations, you can easily rely on supply and demand indicators to make profitable orders.
But, is it really that easy?
Except if you learn how fundamental analysis is done.
Take these steps to begin your analysis.
a. Study Macroeconomics of a country – Review reports of the Gross National Product (GNP) and the Gross domestic product (GDP) of your country of interest to gauge the strengths and weaknesses in its economy. Finding out about any filed bankruptcies, unemployment rates, retail sales and consumer leverage reports should be enough to give you an idea of a currency’s inefficiencies or efficiencies.
b. Make Trading decisions based on Geopolitical events – Misfortunes like wars or major events like Brexit will trigger volatility in global stocks and currency markets. Use such info to decide what to trade and when.
c. Use Gross Domestic Product and Inflation Information to make trading decisions
Simply put, fundamental analysis revolves around economies.
Good economic conditions trigger growth in currency value. And bad economies lower currency value.
Are we still together?
If analysis is too much… Buy Forex Signals instead. With this method, everything is done for you by the signal provider. You only need to place your trade orders when you receive the signals.
#2. Where to Pick Forex Signals
What are Forex Signals?
Forex signals are suggested entry or exit points for a Forex Trade. They come with specific time and price.
Where can I find Forex Signals?
Forex signals are provided by Forex Signal Providers. The best in the industry is Forex Signals dot com
Though the service is paid for, you will have a 7 day free trial before committing to pay for it.
I suggest you register with Forex Signals dot com try it for FREE for 7 days and if you find value in it; subscribe to increase your winning consistently with the rest of Forex mentors in the platform.
If you are a beginner and you need help, I recommend you talk to Max Norbury you won’t believe how easy he makes Forex sound. Plus you will become a better trader under his mentorship.
And, just as important as buying signals is learning how to use trading tools.
#3. Why Forex Trading Tools And Softwares Are Important.
- They give clear signals of when to enter or exit the market
- Indicators help traders pick trends
- Technical Analysis Indicators alert you of asset volatility. If you take an advantage of the volatile asset when you receive the alarm, you can easily make profits off the market.
- You can use some indicators to predict future asset price
Examples of Trading Tools
The most common trend indicators in Forex are SMA, EMA, WMA, Bollinger bands, Ichimoku Cloud, Alligator… There are tens other indicators that you can also use to make better predictions.
P.S – If you don’t want to use self hosted platforms like Olymp Trade Forex – to practice and learn how Forex works , try using Forex softwares like MT4, Zulutrader or Ninjatrader. MT4 works well with XM Forex (Get Free $30 registration bonus) & it is free to install