Traditional trading on the interbank Forex market involves the use of a variety of indicators. Indicators are designed to help the trader in his work - they show the average price, the state of "overbought" or "oversold" of the market. Sometimes the indicator can give a conditional signal to make a particular deal. However, in trading, you can do without using this tool. Moreover, in most cases, the indicator cannot unambiguously indicate the future likely movement of the market.
Instructions
Step 1
Use a clean chart of the price of a currency pair for trading. The simplest type of analysis is visual. Use different grouping of data on the chart: monthly, daily, weekly, hourly, minute. The so-called "bar" chart is popular among traders, where four prices of a currency pair are indicated: the maximum price for the period, the opening price, the closing price, and the minimum price for the period. By analyzing the combination of these four prices, you can build a forecast of further price movement.
Step 2
Use candlestick analysis popular among traders. A candlestick chart is similar to a stick chart, but more visual. The four types of prices described above are also taken to construct a candlestick. A rectangle is drawn between the opening and closing prices, called the body of the candle. Vertical lines (“shadows”) are drawn above and below the “body”. If prices have risen during the day, the body is painted white; if prices have decreased, it is painted black. When using candlestick analysis, keep in mind that at too small (minute) intervals, such an analysis can give a somewhat distorted picture of price movement.
Step 3
Use elements of technical analysis such as support and resistance lines. The resistance line connects important highs in the market. Such points appear when buyers are unable or unwilling to buy at a higher price and the market “rolls back” downward. With the opposite course of events, local price minimums are set. When there are enough such lows, connect them - you get a support line. The angle that characterizes the support and resistance lines allows you to make a forecast of further price movement.
Step 4
Trade the news. Use the news feeds of various news agencies specializing in the analysis of economic factors affecting exchange rates. Analysis of the economic data of a particular country, for example, the unemployment rate, the value of the gross domestic product, and so on, allows with a certain degree of accuracy to calculate the value of economic indicators and to predict the possible reaction of the market to such messages.
Step 5
If you have sufficient trading experience, build your strategy on intuition. However, such trading can only be afforded by very sophisticated traders who, among other things, have a sufficient deposit to minimize losses in case of erroneous actions. Intuition can be very powerful, but it does not always allow the market to outplay it.
Step 6
To determine the best trading method without indicators for you, try several methods, including different combinations of them. There is no single correct way to trade, they are all individual and in many respects the effectiveness of a particular method depends on your experience and skills.
