People are always fighting hard to survive in the global financial crisis. The rise and fall of the consumer demand have created an invisible burden in our society. To change the life standard and secure financial freedom, Forex trading industry has always been the favorite sectors for the smart investors in Australia. The price of a currency pair is always fluctuation based on the current economic events across the globe. Despite the complex nature of the Forex market, the number of retail traders is increasing at a lightning speed. Professional brokers like Saxo is offering a premium trading environment to the retail traders so that they can easily make a profit by using the market volatility. Though trading is one of the most lucrative business in the world very few people have proper assumptions about this industry.
What is Forex trading?
Forex trading is nothing but buying or selling foreign currencies with the help of brokerage firms. The traders use the market volatility and relative difference of price movement to take make a profit. Sounds complex? Let’s make it clearer. Let’s say AUDUSD pair is trading at 0.7800 in the financial market. This means you need 0.7800 Aussie dollars to buy 1 US dollar. So if you buy the Aussie dollar and sell them at a higher price you will make a profit. This market is very much similar to our traditional stock market but with one exception. The Forex market is so big that no can manipulate the price movement of the currency pair. Everything is very transparent in this industry. If you can do the correct math you don’t have to wait for other people decide to make money. The independent nature of the Forex market has open the door of financial freedom to many retail traders.
Fundamental factors of the market
So what drives the price of a certain asset? Why CFD trading in Australia is so much popular? As we have said earlier, different economic factors across the globe cause the price movement of the financial assets. In this modern world, trillions of dollars are being transacted across the globe. Due to this high volume of transaction, the Forex market is extremely volatile in nature. Due to its volatility, the smart investors in Australia love to trade the market. You have to understand the basic principle of the investment industry. You need to roll your money to make more money. This is what the Forex traders do to live their life. As a currency trader, you have a lot of high impact news. Major news release like NFP data, trade balance, average hourly income etc. can cause a high level of market volatility creating a golden opportunity for the traders. So educate yourself with the fundamental factors of the market to become successful at currency trading profession.
Technical analysis in Forex market
Technical analysis is the study of the raw price movement in your trading platform. The expert traders use the market graph to find the potential support and resistance level. When the price of certain asset hits the support level, the trader’s execute long orders with a hope that price will go up from that level. Similarly, a resistance level is such a place where the price starts to fall due to excessive selling pressure. Understanding the technical part of the Forex market is very easy. You can use the demo account to develop your trading strategy. In order to save yourself from the wild swings of the market, you have to do technical analysis in the higher time frame. Lower time frame data will always give false trading signals. But no matter what you do, you will never be able to predict the price movement with 100% accuracy. In order to protect your investment, you must trade the market with proper risk management. And always risk a small portion of equity in currency trading.