For the purpose of facilitating the exchange of currencies, Forex is the largest and most liquid trading market in the world. Since currencies in the Forex market are always traded in pairs, the first question a trader needs to answer is which currency pair would be best to trade, and when to get in and out of the market.
This article will help you improve your selection and decision making process through some personal information on currency pairs, how to know when to buy or sell in Forex.
What to trade on Forex
First, let’s take a look at the major currency pairs. It show the important of the USD on each of the six major currencies.
- EUR/USD
- USD/JPY
- GBP/USD
- USD/CHF
- USD/CAD
- AUD/USD
EUR/USD is the most popular forex asset in the world so it is often recommended for beginners to trade. Thanks to its large liquidity, this currency pair is very balanced when used for statistics and analysis. USD/JPY is more volatile, but predictable through the situations of several countries. And USD/CHF is a bit more stable, suitable for traders who don’t want to run into high volatility.
The first advice for you is to find your own trading style, don’t be afraid to try all the currency pairs to find the right asset class. On Olymptrade, you can easily find indicator, oscillator, more and more tools support trading in the left menu.
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Buy and Sell Forex assets
The second but extremely important question is how to determine when to buy or sell in forex.
There are two approaches to solving this question: Technical Analysis and Fundamental Analysis.
Fundamental analysis
Fundamental analysis is trading based on economic news like interest rate, inflation, unemployment rate, etc. You may be wondering why, but when you trade Forex, you are buying the country’s currency. And the financial situation of a country will greatly affect the value of that country’s currency against the USD. At the very least, you need to know the release schedule of the economic calendar and prepare a strategy in case your predictions go wrong.
Technical analysis
Technical analysis uses various indicators, geometric factors, and statistical analysis to predict future price movements. In many cases, traders create their own strategies or learn from experienced traders. At least you must master five types of analysis techniques such as SMA, SAR, DeM, MACD, etc to start a complete strategy.
You can use the Olymp Trade platform, which supports many analytical tools and indicators, with the ability to provide information quickly and accurately. Helps to reduce the time required for prediction.
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Forex trading strategy demonstration
How to buy and sell currency pairs by putting your analysis to use. Let’s start by examining the fundamental background of the EUR/USD pair:
- In 2022, the USD becomes stronger than all other currencies.
- The USD has completely surpassed the EUR (across the ratio 1).
- Central banks of developed countries begin to raise interest rates due to record inflation
- All markets fell throughout the year, except for the US dollar.
We can see EUR/USD really going down. You should consider trading with this currency pair.
For beginners, there is no need to use a combination of too many complex indicators for technical analysis. Simply add a 20 period SMA to the chart and take a trade when the chart crosses the MA.
When chart crosses the SMA20 from top to bottom is a good place to open a Bearish.
Same for a Bullish, for example, USD/JPY has a very clear uptrend. We will catch it up when the chart crosses the 20 SMA from the bottom, you can open bullish trades.
Trade by your way
Each trading market has its own peculiarities. The choice of trading metals, oil or cryptocurrencies depends on your own analysis and choices. You should try them all and define your own trading style. For FTT or Forex, the best way is still practice to gain experience.
By using the Olymp Trade online trading platform, you will be provided with a wide range of indicators and strategies for free. Helping you make decisions faster and more accurately than usual. Deposits and withdrawals take place quickly within 24 hours, easy to withdraw capital.
