Analysis stages in Forex
It will not be wrong if we say that Forex traders lead their
lives, living on the edge. You never know what’s going to happen
the next moment. In this currency world of speculations,
instincts, calculations and uncertainties, the market experiences
one moment of total harmony, and the next one of absolute
Amidst such high degrees of speculation and large amount of money
at stake, can we precisely foretell the trend this market is going
to follow each time? And furthermore, can we bet high capital on
For all this, we first need to be clear with the basics. The
basics which tell us exactly what causes the market to move in the
direction it does? What makes it follow the trend it does? Why are
different traders trading with same currency using different
strategies? Answers to all these questions can be a little tricky
especially knowing that every trader senses different set of
indications and warnings each time the market moves.
Every trader has his personal instinct behind his decision of
buying or selling a currency, keeping in mind the atmosphere in
the market. But there is still something that every sensible Forex
trader does, Analysis! Before investing a sum of money in the
market, any sensible trader would want to analyze the market, get
full knowledge of the situation and be equipped to forecast what
movement the market might take in the future. And to do this
analysis, a trader must keep in mind the six important stages of
analysis in Forex trading, which are:
Who tells us about the people involved with Forex who form the
market and bring about action in it.
Why is about comprehending the outlook of the Forex market and the
openings or prospects which it provides to its traders.
Where tell us to match our goals with the goals a genuine and
When tells us about the right time when our trades can bring us
What is all about choosing a trading medium or currency pair on
the basis of your budget and investment principle.
How is about choose a trading toolkit which will help us advance
our trading skills and techniques.
Every trader requires building up a fanatical sense of the Forex
market and what’s happening in it and around them. Not every move
of the currency market can be predicted though, but we can
definitely try developing an understanding of the situation and
the environment of the market.
What all the above mentioned six stages do is help us in creating
more advantageous trading options. With the systematic and
balanced use of these stages, we can easily create and execute a
complete trading plan, the one that covers all the major trading
aspects and angles.
It is important to understand who actually trades Forex? Also
needed to be known are the participants, and the reasons for their
success and failure. This will help us make use of the points
which lead to successful results and avoid the ones which led to a
To know why to trade Forex at the first place is the very reason
why we should be interested in trading with it. Only if we know
the advantages and disadvantages of this market will we be able to
make up our minds for or against trading Forex.
It is also important to know from where we should trade. Always
choose the right trading platform or broker who can professionally
allow your trading style to mingle with its approach.
For deciding upon what to trade for, we should always choose a
currency pair and money management method which will boost your
Deciding on when you should trade is also an important aspect to
be kept in mind before you start to trade. Always advisable is to
trade when the situation you are in, is most liable to generate
the best circumstances for you to execute your trading methods and
Choosing on how to trade should always be done keeping in mind the
usage of those methods that make best use of your skills and also
help you follow the previously well-known successful traders of