Whether you are new to the world of currency trading, or you are a seasoned professional, the market can be a confusing place. However, with a little knowledge and a little patience, you can learn to trade currencies with confidence and get the most out of your investment.
Using a time frame that extends from 8:00 AM to 22:00 PM GMT allows for a wide swath of trades to be made. These include forex, stocks and bonds, commodities and cryptocurrencies. The most notable occurrences are those originating in Asia. Aside from the usual suspects, the UK and Germany also make notable appearances. These two markets are not congruent for the entire timeframe. It is only after the Japanese market shuffles its hands that the Europeans get to show off their trading chops.
The aforementioned lull in liquidity occurs around the time of day that the British are back in their pyjamas. This is a great time to catch the end of day glow worm as well as some of the best trades of the day. In fact, you may be able to make a buck or two from the currency exchange rates by the time the clock strikes midnight in your neck of the woods.
It is also possible to find yourself doing the same in the opposite direction. While there is no official or unofficial rule of thumb for the time of day best for forex trades, the time of day you are most likely to find the best deals is after London and New York have departed the scene. This is a particularly good time to look for a forex broker who is not only transparent, but is also willing to offer you the best available rates.
If you have a tighter budget and are looking to get in on the ground floor, you can do so for a fraction of the normal fee by registering with an online forex broker. However, there is no guarantee of success or of a fair price. Some reputable companies will even offer you a free demo account to test the waters before committing your funds to a live account. Getting started is the hardest part. The best way to do it is to read up on forex trading, take a look at your financial statements, and learn to be patient. A bit of frugality will go a long way in your quest to succeed.
Economic data releases
Hundreds of economic reports are released each year in the eurozone. Each release has a set time and a set date. This means that every trader has the same access to these statistical releases.
The Consumer Price Index (CPI) is a useful measure of inflation in the eurozone. The CPI is calculated by averaging the prices of a basket of goods in an average household.
In the eurozone, the CPI is not the only one to measure inflation. Other types of Economic Indicators are designed to measure market growth, supply and demand figures, and other factors.
The Caixin Purchasing Managers' Index is designed to give attention to smaller companies. It measures nationwide manufacturing activity. This may have a bigger impact than its monetary counterpart, the CPI.
A positive surprise in the USA's GDP will be bearish for the EURUSD. The US economy is the largest in the world.
Inflation is projected to stay high. Prices of non-energy commodities are expected to rise moderately in the next two years. The European Central Bank (ECB) has announced plans to raise interest rates.
The European economy will be affected by a number of key events in the near future. Specifically, there is the possibility of a recession in Europe. A war in Ukraine will also weaken trade and confidence.
The euro's GDP is the most important release in the eurozone this week. In addition, there will be a number of other important economic releases this week. In the coming week, there will be a number of key events in the United Kingdom, France, and Germany. These events will be closely watched, especially in the light of the recent events in China.
The UK will have a number of important economic reports in the coming week. These include industrial production, the cost of living crisis, and employment figures. These will be closely monitored to see if they have any impact on the UK economy. There will also be a number of key events in Japan. These include the release of the Q2 GDP and industrial production figures. These will be watched closely for clues to the health of the Japanese economy.
Technical indicators to predict a reversal getting started
Using Technical indicators to predict a reversal can transform your trading experience. However, they should be used with other indicators and chart patterns. Then, you can confirm a reversal before exiting a trade. You can also use moving targets to make sure you are entering a reversal.
One of the most common ways to find a reversal is through the Relative Strength Index. This indicator compares closing prices to the previous closing prices to show overbought and oversold levels. If you are a buy low, sell high trader, then RSI is a good indicator to use.
Another indicator to use to predict a reversal is the Moving Average Convergence and Divergence oscillator (MACD). It is made from two moving averages. The longer the moving average, the more periods are used in the calculation. When the indicator falls below the neutral line, you know the trend has shifted.
You can also use Bollinger Bands to find reversals. They are derived from moving averages and have three lines: the middle line is a moving average, and the outer lines are standard deviations of the asset. When price falls below the middle line, it indicates that a reversal is imminent.
A reversal bulge is another indicator to look for. It is similar to the overbought/oversold levels found by the stochastic oscillator. It is defined by a mass index that rises above 27. This indicator is different from the moving average because it does not have a market neutrality. However, it can still be used in a trading range.
You can also use a mass index indicator with other technical indicators. You can put it on the price chart at the bottom and use it with indicators that determine the trend. You will find values of +1 to +12 on the chart. This indicator is based on a mathematical formula. When the mass index rises above 27 and stays above, it indicates that the trend has shifted. When the indicator drops below 27 and stays below, it indicates that the trend has reversed.
You can also use the Relative Strength Index to determine overbought or oversold levels in your currency. The default levels are 70 and 30. However, if you are trading in a currency that is overbought, then you will want to use a lower level.