Determining the Future Direction of a Currency Pair
Determining the future direction of a currency pair requires a strategy. The best you can do is to determine if your strategy worked in the past and then forward test it without risking your capital. You can paper trade where you keep track of your trades on a spreadsheet or piece of paper, or you can use a demonstration account.
You can learn about different strategies from videos or articles. If a strategy appears too good to be true, it is. What you want to learn is the basis for why markets move. There are two general ways to think about this. The first is that when there is new information, the markets will adjust to incorporate that new information. When there is no new information, all the current news is priced in and the markets will ebb and flow in technical patterns.
There are dozens of different patterns. Prices move toward support and resistance levels, as momentum rises and falls. Most of the time, the markets are range bound and then new information appears creating a temporary trend until consolidation reappears. It’s helpful to perform fundamental analysis on your own, which you can also see online. Many brokers and reputable financial news outlets provide financial calendars that follow economic data.