How the professional traders analyze the Forex market

The Forex market is a vast market and every single day the number retail traders are increasing at an exponential rate. Due to the recent advancement of technology people now have access to all the financial asset. With a simple computed and active internet connection, you can easily trade this trillion dollar market. But having the access is not ensuring your profit factor. You have to know the perfect way to analyze the market data or else you will be losing a huge amount of money. People in Singapore are smart in this context. Most of them demo trade the market until they feel comfortable with their trading system. Some traders might often ask how do the professional traders analyze the market and make profit consistently. Indeed it’s very good question and being an active participant you must know the answers.

Experts have in-depth knowledge: Most of the senior traders in the online trading world has a clear knowledge of this industry. They know that this market will not give any good profit to novice traders. They have spent years after years in developing the single trading system. But when you develop your own trading system don’t focus on the technical part only. Most of the retail traders trade the market based on their technical skills but if you consider trading as your full-time profession then you are just making a big mistake. You need to have strong knowledge in the fundamental analysis section also. The study of fundamental factors will give you a clear idea about the strength of the prevailing trend. Sometimes the novice traders will get confused with all the high impact data release but over the period of time, everything will be crystal clear to you.

Use higher time frame

Higher time frame trading is very common in the professional trading industry. The expert at Saxo always focuses on the higher time frame support and resistance level to find the best possible trade setup. Before you place your trade in your online trading account make sure that you have spotted the prevailing trend first. For instance, if the existing trend of the EURUSD pair is bullish then you should only look for bullish trade setup. You might give much convincing bearish trade setup in your trading platform but you must ignore this signal. This is where the most novice traders fail. They simply think that by trading the reversal they are going to ride the new trend and make a huge amount of money. You can trade the trend change but wait for the confirmation and look for a clear break of the key swings of the market.

Rational logic

Analyzing the market-based on real time data is very crucial for long term success. If you trade the market-based on your emotion then you will never be able to make a consistent profit. When you start your trading career make sure that you have complete control over your emotion. But during your early stage, you will often get emotional and face a huge loss. But this should not make you frustrated since losing is just a part of the trader’s career. Always trade what you see and use your rational logic to place quality trades.

This market is extremely volatile in nature and a single mistake can wipe your entire trading account. The experts always risk less than 3% of their account capital in given trade. They know trading is all about probability and taking risk more than 3% is very much similar to a suicide mission. If you do some research then you will find that most of the retail traders are losing money due to lack their risk-management plan. So if truly believe that this industry is the right place for you then never risk any amount which is bigger than 3%.If possible stick to the 2% rule of money management.