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Key Tips for Trading in a Fluctuating Market


Have you ever observed nature? Many things, such as the trajectory of a bee, may seem random.  At the same time, they are not – there is nothing random in nature. They appear random only because you don’t know the reasons that push this or that object in a certain direction. Normally, the brain can’t comprehend when too many things happen simultaneously – just like in the market.

When you look at the charts, especially at small timeframes – price moves look random and unpredictable as well. Nevertheless, there are reasons that push the dollar, the euro, the pound, and any other currency or commodity the way they go.

The problem is that the charts you see in a trading terminal provide a limited amount of information. If you were to study a chosen currency pair thoroughly, you would need to know a number of things:

If you knew that, you would be much better at understanding and predicting where the price may head because you would see its inner impulses. However, MetaTrader doesn’t show that. What to do?

Reality – reactions


Traders involved in the market are like cogs: millions of revolving cogs push the market's mechanism further and move the prices in different directions. However, traders react – they don't randomly decide when and what to buy or sell. They are a second link in the chain of events that precede the last link – the price. Therefore, if you saw this second link, you would be able to judge the immediate impulse that pushes the price. However, if you cannot – which you cannot with MetaTrader – then you go one step before in the chain of events – to the first link. The news.

This is what happens: traders wake up around the world, have their coffee, read the news, and, based on that news, make new trades and adjust existing ones. As a result, what you have to do is watch the news instead of watching other traders. This way, you will make a direct link between the world of events (the fundamentals) and the world of the market (prices).

#source


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