Part 5 - Understanding statistics

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You have now become somewhat familiar with how the stock market works, and you understand to a point what is involved in trading on the Foreign Exchange Market.  Now, you would like to know how to gauge market trends in order to profit from your business ventures on the open market.  We are no longer discussing penny stocks and playground games.  You want the real goods.

The name of the game is statistics, and the first rule is that you must be aware there is no such thing as a sure thing on the stock market.  While you can never be 100% sure at any given time of the next move that will be made on the market as a whole, being able to read statistics and interpret them will place you ahead of the pack in regards to “guessing” what will happen next.

Investing is a lot like gambling.  If you can keep track of the cards that have already been played, you are more informed, statistically, regarding what is likely to be dealt next, meaning you can place abet with greater insight than someone who has no clue what has already been played.  With the open market, if you have information as to what has already occurred over the past few days, months, or even years, you are again placed in a better position to more logically conclude what will happen next.  You simply learn the pattern and follow it to the end, reaping the financial rewards.

Charts And Chartists

Wait, did you think you were going to have to research and map out the market’s past all by yourself?  Of course not!  There are people who get paid to do that sort of work.  They monitor the market hourly, daily, weekly, monthly, and yearly so that they can provide big-time traders with the same knowledge mentioned before.  The more an investment company knows about the market, the more money they can make.  The same is true for stockbrokers.  They make money when you make money, and they want to do the best they can to make sure that you make intelligent decisions.

The best part of this is that you have access to the same information as these VIP clients.  Chartists, who are essentially market analysts that publish their findings in easy to read charts, produce what is referred to as a candlestick chart.  These charts are basically a combination of a line graph and a bar graph that show the trend of various stocks, indexes, or other interests over a specified period of time.  Therefore, you can easily determine if the commodity is on an uptrend or if it is taking a downturn, when the last major change occurred, and how long it is predicted that the stock or bond will continue on the current path.

This concludes our 5 part ecourse on "Insider's Guide To Forex Exchange" Please visit my forex trading guide below to discover the rest of the information you've been searching for.