Have this question ever occurred to you, what if you could predict the future volatility by looking at the past movement? We know it sounds practical but does this idea really work? The beginners are afraid to experiment with capital and we wholeheartedly support that decision. Many ideas often arise in mind but there is no answer to those thoughts.
One of the most popular puzzles in Forex is guessing the future pattern. The investors take a dive in the memory lake and relate the vents based on past experiences. This is called recency bias but if there was any technique to successfully assume the possible upcoming pattern, how wonderful would that be! Yes, we are going to explain this concept step by step and demonstrate if this idea is viable.
Before we begin, there is one important reminder. Just because this article has convinced you this feature can be possible, don’t neglect the strategy. It still depends greatly on the analyses that derive hidden information from the pattern and trends. The indicators are also necessary to successfully manage the fund. Lastly, knowledge is the stitch that sews all the parts together and produces the desired result.
History repeats itself
If you analyze the Forex chart with an extreme level of accuracy, you will understand why the professional traders in Hong Kong refer to the term “History repeats itself” Doing technical analysis is nothing but finding the potential trade setup at the key support and resistance level. And the traders find the key levels by using the historic price movement. But to do the proper market analysis, you must visit https://www.home.saxo/en-hk and learn more about the professional trading platform. If you are not sure, feel free to trade with brokers like Saxo since they will always offer you a premium service. And you can easily predict the price movement based on past data.
The concept is partially possible
Yes, if not fully but partially this concept can be transformed into practical outcomes. The idea is simple, use the fact, an event that has occurred in the past and analyzes the contributing phenomena. An example will help us to elaborate on the process. A trader has observed that the price of a specific pair has moved up in the past months whenever the price hit a certain point. Now, the takeaway from this movement is to identify the existing situations at that time.
Try to know whether any news was released that was related to the currency pair. If the government has undergone economic reforms or there were other conditions that might be related to the volatility. It can be said with eyes closed that many similar patterns will be repeated in the future but only design the strategy if the conditions are also identical with the old pattern. In this technique, it is possible to predict the future with the help of recent events.
There is one downside, the present environment gets ignored. Remember, this is a live sector, every decision needs to be made based on the present volatility. Small information has the capacity to turn the price movement. Do not become obsessed with discovering former secrets. Try it in a demo account to see if this method works. A professional trick is to stick to an old, classic method to develop the basic formula. After the initial success, people gain the necessary ideas to formulate a new approach to investment.
Is there any risk?
You cannot fully avoid the dangers when it comes to trading in Forex. Most of the techniques can backfire, if there are any shortcuts used, prepare for unexpected results. The idea of forecasting upcoming events may not always turn out as planned. As the volatility moves for different reasons, the investors should be ready to cope with the changes. To get maximum perfection, we advise combining the strategy with reducing the flaws in prediction.