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Should You Use Forex Forecasts

11:57 AM May 11, 2021
6504
Forex trading

Experienced traders know currency forecasts may benefit them because the correct signal gives them a significant advantage in the market. However, not all exchange rate forecasts are accurate, and sometimes even top traders can be wrong. So let's clarify if they are reliable, what are the main types of forecasts, and where you can find them.

Professionals prefer to analyze market behavior themselves. Slightly less experienced traders rely on forecasts available on the Internet. It’s a rather controversial issue whether it is worth using analytics from other traders or not. Let's find out more about it.

Where to Find Forex Forecasts

The analytics are easy to find. There’s a variety of sources:

  • On specialized Forex sites and on third-party resources with different topics
  • On the websites of brokerage companies
  • In the blogs of experienced traders
  • On the social networks of brokers and on the personal pages of traders
  • In mailing lists of various Forex resources and brokers
  • In Telegram channels and mailings from signal providers and IBs, etc.

Forecasts Types

Not all analytics are the same. You can decide for yourself which one is right for you. Forecasts differ in several ways:

  1. According to the type of analysis, the analytics can be fundamental and technical. The first type is deeper and more complex. It takes into account the influence of political and economic indicators on exchange rates. Technical analysis is based on price action and takes into account past market behavior and patterns of its behavior. This also includes a forecast based on indicators. The most accurate forecast includes both types of analysis.
  2. In terms of duration, the analytics can be short-term and long-term. The short-term forecast is usually given for the current trading day. These forecasts are mainly formed with technical analysis. It is based on the behavior of the price around price levels and the formation of various candlestick patterns and figures. This analytics is used by intraday traders. Longer forecasts (usually for a week) include a combination of technical and fundamental analysis. Swing traders usually use such predictions as their trades can last for several days. There is also long-term analytics. It is based solely on fundamental analysis, since technical analysis is practically powerless here. Such forecasts are suitable for swing and position traders that hold trades for several weeks or even months.
  3. According to their availability, forecasts can be divided into paid, free and shareware. To receive the latter, a trader must join an IB group, register with a brokerage company, etc. Paid analytics are done by professional traders and companies upon request. As a rule, these are high-level analytics using deep fundamental analysis. Free forecasts are the ones found on public resources and blogs of different traders.

Should You Use the Forecasts

Remember that analytics are done by traders just like you. No one can predict market behavior with 100% accuracy. You may even stumble upon diametrically opposite predictions. And this doesn’t mean that one of the sources is deliberately trying to deceive you. They just use different methods of analysis.

What to do? If you are not yet able to make your own predictions, you should rely on the opinion of more experienced traders. It is best to choose a few sources that you trust the most. The quality of each specific source can only be found out empirically or from the reviews of other traders.

Start with a couple of free forecasts sources. But do not blindly trust these predictions. If your instinct tells you otherwise, listen to yourself. Over time, you will learn to read charts on your own and, perhaps, start publishing your analytics to help novice traders.

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