Forex Prediction Strategy

Every day, millions of dollars change hands through a complex system of international currencies and electronic exchanges. The forex trading world is one of the world’s biggest investment alleys, and certainly one of its most reliable. Free of manipulation like the stock market, forex is thought, by many investors, to be the ultimate both short-term and long-term cash investment opportunity.

But despite its benefits, most forex traders don’t make it to the top. They might step into the world of forex trading with optimism and an eye on the prize, yet fail to ultimately make it. They may, at some point, see success, but lose faith as their successes become outweighed by failed trades, lost money, and investments that gradually failed to pan out over time and with greater volume.

These are all frequent forex trading stories – ones that almost any broker can relay to you. But as common and easily accessible as these not-so-successful stories are, it’s very possible to avoid the possibility of become a burned-out ex forex trader. All that’s required is right right mindset, and a rock solid system for understanding where the markets will move before other traders know too.

That, however, isn’t so easy to find. Many traders believe they’ve worked out the forex markets, only to see their results diminish over time as statistical significance steps in and wipes their ‘top’ investment choices back to limited profitability. It’s possible to be an outlier with bad data, but a failing investment doesn’t last long – something many traders find it quite hard to deal with.

This guide covers some of the more common – and more successful – forex prediction strategies for traders. It’s not a do-all guide to predicting the currency markets, and on its own it’s unlikely to form a successful trading strategy, but it is a leading resource nonetheless. Spend some time going over a range of forex strategies included here, and you’ll no doubt find one that works for you.

One of the most important things to remember as a forex trader is that the market isn’t controlled by you. You have no influence over the value of a currency, unless of course you’re trading at a massive volume. Unlike the stock market, where manipulation is possible and exploitation a reality, forex is a game where being the most informed trader is good, not simply being the most manipulative.

How can your become an informed trader? There are several ways to gain this advantage as a trader, each of which is detailed below. The first, and perhaps the most important, is by looking at the short and long-term events surrounding currencies you plan to invest in. This is particularly true for long-term traders, who aim to maximize the value of each trade by holding the currency for a long time.

For example, many currencies experience periods – often weeks long – of gradual value build-up, in which any well-timed investment is likely to produce a profit. With the right amount of information, you can spot these periods and capitalize on them. Look for long and medium-term trends in how a currency performs, and make investments in that currency before you see another one happening.

Alongside this, you can look at short-term patterns within trading data, often on an hour-by-hour or even minute-by-minute basis. Some currencies fluctuate dramatically throughout the day, leaving a wide open door for smart investors. By building a good micro forex prediction strategy, you can get the most from these short-term value windows while other investors look at longer-term changes.

That’s only one half of the puzzle, however. Being a smart investor – an informed investor – isn’t a game of purely knowing about when currencies perform well. It’s also about knowing when it’s not worth investing in a currency. Skilled traders don’t just plan for market ups, they also plan for down activity, which is inevitable in the market for any currency, at least on a relatively small scale.

For example, even a currency that’s booming in value – often due to a strong related economy – will have its down days, or even down moments. Great investors look for these diamond-type chances to invest, as few others expect them to occur. By closely monitoring the performance of a star currency on the market, you may be able to spot periods where it peaks, or even dips downwards in value.

These moments can be exploited using modern software, which can be programmed to make a fast currency purchase at times where the value of a particular currency decreases. Using robotic forex software, the like of which is available all over the internet, it’s fairly simple to capitalize on these frequent upwards and downwards shift in how valuable a certain currency is on the global market.

No forex prediction strategy is risk-free, however, despite what some sales letters may claim. When you enter into any arbitrage-based business, the possibility for loss is very real. Don’t think that you have an unbeatable strategy – it can, and possibly will, be beaten by the market at some point.

However, with a sound forex prediction strategy, it’s very possible that your wins will outweigh the losses that accompany them. Think of forex trading not as a win-all game, but as an act of having a small loss outweighed by a big win. Then you can put your forex prediction strategy to the test with real investments, and produce real returns alongside them.

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