Exchange; is a very important term when it comes to forex trading. Forex has many other names for it, foreign exchange, FX or currency trading. Forex market is enormous market. It is the largest market in the history of trading. With the daily average trade reaching up to trillion this is the only trading market which makes use of liquefied money.
Forex is all about exchanging
In stock markets we exchange or buy or sell stocks and in forex we exchange different foreign currencies depending upon their values. It has become common now all around the world that people travel to foreign countries. All the major countries have their own currencies which have their own values. This has led to forex or currency trading. Similar to stock trading you can trade different currencies as well. The exchange of currency depends upon the value of it.
How does this forex work?
The trading happens usually between 2 different countries’ currencies. One has more value than the other. When you think that the value of one currency is about to increase, you buy it. If it seems like the currency value is going to drop, you sell it immediately. Imagine that one country is decreasing the value of its currency we can sell this, if you think that this trend will persist, for more profit. On the other hand, if by chance your prediction proves to be wrong and the trend changes in the opposite way you will be in loss.
With this the question arises weather trading has become a kind of gambling. We can say it is a kind of gambling because in trading of forex you get a chance to know the past pricing before you trade them. This Again is useful only if you know how to make use of this advantage you have as a forex dealer or trader.
Some of the most accurate forex indicator
- The Bollinger band.
This band simply makes use of support and resistance technique and price action support. This helps in detecting any change before the move happens.
- the relative strength index.
This indicator tells us when price is oversold/overbought before the trend begins. This gives us a chance to gain good profit with very little risk. This is one of the most accurate one.
- Simple moving average
Many times, this is wrongly used because most of the traders use this to detect the trend after it is confirmed and start investing. The most accurate way to gain a Win-Win is bounce method.