The prices in Forex or other financial markets seem to move up, sideways and down everyday. Many times it has been witnessed that forex prices are steadily moving in one particular direction. At that time, an individual may get easily tempted to invest in that share. Murphy’s Law! As soon as the person buys the share, suddenly it is witnessed that value of the share goes in the opposite direction, leading to a big business loss. On the other hand if the value of the share keeps to rise the person would profit. So, understanding the market is the basic and foremost step of forex trading. An individual is always advised by the financial experts that he must not gamble blindly. In some cases the luck factor is also needed though.
If an individual does not understand how the rates of a share go up and down, he can never be a good forex trader. For understanding the market the subject of statistics is very much necessary. Statistics support the trader in his decision making process, providing him with the likelihood of an event – the higher the probability of an event, the more certain we are that the event will occur. Understanding the probable future value of the share simply depends on certain factors. Moreover the statistical review of the particular share helps to understand this matter more clearly.
During a single trade the rate fluctuates a lot and this seems to be a big problem in forex or any other financial market. But after checking around 100 trades, an individual can start understanding the patterns, events and moves. With the help of statistics an individual can easily predict the long term value of a particular share. Statistics guide the person towards the right decision about a particular trade. The share history and its rate graph have to be studied in detail. Only then, the person can understand and predict the future value of a share.
Huge risk factors are present in forex, binary options, or any other financial market. The market goes up and down. The value of shares may change within a fraction of a second. A person new to the game, who has got minimum idea about share trading may face huge problems to understand the forex trading market. Many have lost all their capital by bidding on a growing share whose value dropped drastically. So, you need to be very patient and tactical while investing on a particular currency or a share. The statistical analysis helps an individual to get all the records necessary to take a wiser investment decision. So, I would like to advise anyone not to invest blindly without understanding the market. It may lead to a big loss at the end.