The foreign exchange market is a worldwide financial market that runs over-the-counter. There is no central place for forex trading or to conduct forex analysis makes it a decentralized market. Relative values of various currencies are determined in the forex market. This market is considered unique due to various factors, including high liquidity (because of huge trading volumes), geographical dispersion, and the use of leverage. Another important factor that makes this market stand out is its continuous operation. This means that it operates 24 hours a day except for weekends.
What are the Benefits of Performing Forex Analysis over the Weekend in Forex Currency Trading?
As the saying goes, "plan your trade – and trade your plan," a planned move will help you achieve your trading goals smoothly. Here are the main benefits of conducting weekend analysis in forex trading:
Establish a Big Picture
Weekend analysis lets you create a big picture view of a specific market that you are interested in. During this period, the markets are free from dynamic flux as they are closed to trading. This helps traders think objectively, clear of any emotion.
Set up Trading Plans
By performing trading analysis over the weekend, traders can set up their trading plans for the week ahead. This, in turn, enables them to decide which trading plans they would like to implement. Preparation in advance always pays. When the markets are closed over the weekend, traders can study weekly charts and find patterns and news that may affect their trade. You may find news or experts indicating a market reversal when a pattern is perhaps making a double top.
Sometimes, experts are just setting a trap, hoping you to get caught in it by getting lured to the market. This will allow them to sell their positions on increased liquidity. Such actions make it vital for traders to formulate their upcoming trading week rationally.
Routine Preparation Method
Many traders perform a weekend analysis to establish a routine preparation method. This helps them create a trading plan in the specific area they are focusing on. This further lets them establish the necessary mindset for the week ahead.
Basically, to understand the current circumstances in the forex market, traders should take weekend analysis as a base. This is one of the fundamentals of forex trading.