Online Forex trading allows you to buy one currency pair using another currency pair. FX trading can be an exciting hobby and an excellent source of income.
Forex trading has become very popular with traders around the world in recent years among home-based traders primarily for its ease of trading.
The coronavirus pandemic has thrown the world into a tailspin. More than six months after COVID-19 entered our lives, the international community is still facing considerable uncertainty.
Millions of people have lost their income after trading stocks online, following the decline of some companies known to be pillars of the economy.
This is why in 2021, the currency market is attracting a lot of new traders.
As those familiar with Forex trading will know, the last few months have seen massive growth on a variety of Forex and commodity trading platforms.
A fad or a long-term trend?
The circumstances that have led more and more novice forex traders to enter the foreign exchange market are unprecedented.
The amount of data and information available is still small and predictions will only be educated guesses.
With the "waves" of outbreaks in recent months, and surely other new variants on the way, we can assume that many of the underlying causes will remain in effect or reappear as the cases of COVID-19 increase.
The confinements and social distancing mean that market volatility will remain high and that remote working will keep independent online traders focused on the highly variable currency markets for a long time to come.
These are many of the factors that drive people to invest in online Forex trading. Today, forex is accessible and trades commission-free at Avatrade! This makes this market even more interesting, with trading conditions that are unique in the world.
Growth like this is extremely rare for the trading industry.
Over the past decade, the average daily trading volume of currencies has never increased by more than 40% as it has since the Coronavirus.
Of course, this astounding change is a direct result of this year's unusual financial and economic climate, leading to a series of high-impact factors on the economy and bringing great opportunities for currency trading.
Indeed, the currency market requires large swings to bring about significant currency volatility, and therefore interest for online traders.
The large increases in trading activity and the number of account openings have put considerable pressure on French forex brokers.
The high liquidity demands during the Corona Virus showed that small forex brokers were not always a safe choice for traders. While concerns about withdrawals exist, traders are naturally turning to large, reliable forex brokers that are regulated internationally by the major regulatory bodies
How to Read Forex Charts?
Most successful currency traders use stock charts.
Forex charts on FX trading platforms are a very important resource for traders.
This is because they give a visual picture of the value of one currency against another.
If you want to learn how to read currency charts to get a better idea of the values of the currencies you want to invest in the financial market, here are some basic steps to better understand how to use these trading tools.
In order to read and take advantage of currency charts, you need to get them from a signal provider available on trading platforms like Metatrader 4 and Metatrader 5 offered at Avatrade.
Several trading tools, such as currency charts are offered directly on the trading platforms to help you understand the price movements of currency pairs in the foreign exchange market.
Selecting a time frame
One of the most important steps when using a currency chart or any other type of financial chart (stocks, bonds, commodities, etc.), consists in setting a specific time frame.
The values you view are only relevant for the specific time frames you define for them.
With a chart, you can reframe the chart for a specific time period, where online trading tools often allow the user to change the view to a specific period, for example, 1 day, 5 days, 1 month, 3 months, 6 months, or 1 year.
Analyze charts over a fixed period
You will see a line graph representing the changes in the value of the currency over this period.
- Look at your line graph in relation to your Y-axis
When a line fluctuates, it indicates the performance of the selected currency relative to the currency or asset represented in the Y-axis.
- Check your X-axis
You will see that these two axes have segmented values, where your line chart fluctuates in a variable manner.
Look for similar patterns
Traders look for specific visuals in a currency chart to try to predict how future prices will move.
Understand candlestick charting to take advantage of this advanced financial resource.
Candlestick charts show a range of characteristics for a specific trading day, with a high and low illustrating price movement.
Many currency charts include candlestick charts, especially those online, and by observing these charts properly, you can learn much more about the price, than just how it has changed over a period of time.
Look for things like the Fibonacci trend.
The Fibonacci trend is a specific type of price peak or trough. A reversal of this can signify a general trend. Read this type of predictive tool and apply it to your currency chart observation.
Look for moving averages
Moving averages tell you how the price has changed over a longer period. These can be useful when looking at your currency chart.
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