Here at Trade Forex Secrets, learning how to forex trade. This is a one of a kind forex platform that is our ultimate goal.
As you can see here in the video above, I make a trade in the USD/CAD 5-minute chart. I have chosen a level 2 for my risk management. This equates to twenty dollars per PIP (point in percentage) risk on the trade.
Remember for our premarket trading strategies, each candlestick represents 5 minutes of movement with the currency pair in the forex market. After approximately four candlestick movements in the market, our trade is made. The final profit of 106 points or 10.06 PIPs is confirmed.
Forex daytrade training: Market conditions
No matter how much forex daytrade training you go through, certain unprecedented events can’t be foreseen. These events may shake up the forex markets to the extent that none of us could see. However, these events can come in different forms. They may be mass unemployment, general economic downturns or booms, or even natural calamities.
All of these events can upset the natural economic order of things and result in massive losses or gains. It is in these times that understanding forex trading becomes paramount for the trader. So, here are the three main types of events that can shake up forex markets:
How To Forex Trade Market Conditions
The overall market conditions are tied to stock markets, unemployment rates, GDP, and other economic factors. All these different factors affect market sentiment. Hence, people feel secure or insecure in investing their money in currency or stocks or bonds.
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This is what market conditions in general are like throughout the year. They keep changing with the tides, but they tend to remain stable. It’s these market conditions that indirectly affect the forex market. When the overall sentiment is high, the forex market booms. However, when investor confidence and consumer confidence is down, the market suffers. Your forex daytrade training will likely go over this, but so you need to keep an eye on the market conditions.
Premarket Trading Economic Reports
Several economic reports come out each year. These may range from reports about consumer confidence, interest rate or industrial production. Each of these reports has an effect on the forex market. A part of understanding forex trading is how to factor in the effects of these reports on the market. Take, for example, the GDP report that comes out every quarter.
It’s not necessary that it will have a huge effect on the market. This is because it involves so many indicators that are already known by the time the report is released. However, if the GDP report varies widely from the sentiment in the forex market, it can impact the market negatively. This is where your forex daytrade training needs to kick in. You need to recognize the chances to invest or to pull out. You need to be ready to perceive the effects of these changes on the currency pairs you are trading with.
Another example is the Federal Funds Rate. A meeting of various government officials that takes places eight times a year decides the interest rate in a country. This takes into account inflation and how to control it. Hence, the result of these meetings determines monetary policy in a country. That, in turn, directly affects the forex market. If your forex daytrade training is going to translate into profits, you need to pay attention to interest rates.
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Rare Forex Natural Disasters
Finally, the impact of a natural disaster is undeniable. It can’t be overlooked and it can devastate a country’s economy like nothing else. Tsunamis, earthquakes, tornadoes, pandemics, etc., can devastate a region’s economy. It can leave thousands or even millions unemployed as a result. The current global coronavirus pandemic is a good example of how everything can fall apart.
While this sort of thing isn’t typically the norm, forex trading is deeply affected by it. However, during these times, it’s hard to estimate the impact that one variable will have on another. An earthquake off the coast of a major industrial town can result in a tsunami that devastates the town. That can lead to unemployment and major industrial output losses. All in all, it can have quite an effect on the forex market in a couple of hours. However, anticipating that shows how much you’ve trained and invested in the forex game.
How To Get Started With Day Trading