There are 2 main methods that Forex traders use to analyze the market. These are technical and fundamental analyzes. Pure technical analysts can tell you that it is impossible to market the news, because the market is moving so fast, and the news outside will tell you. On the other hand, fundamentalists will say that the market only moves. Technical indicators are always followers. So what methods should we use? To find out, consider these two methods for and against.
The technical analysis is to track past currency price movements, and can be used to identify the direction in which the current price may be located. This analysis can be done manually or automatically. Under the automated system, traders use a software (expert advisor) or robot to help them find trades and identify entry and exit points. Technical marketers believe that all the information needed to run a business is listed.
Basic analyzes are key to determining the price direction of a currency under economic, financial and political factors. Basic traders believed that currency movements, stronger or weaker, were linked to the strength of the economy, financials and political conditions. This is why key reports and news are important to them. News and reports like interest rates, employment, trade balance and GDP are very important. Other information such as retail, durable goods, home sales and ISMs will also affect price movement.
– Helps retailers with specific points of entry and exit.
-Cards can give everyone an easy way to instantly identify trends. This may be because the same data is also seen by millions of marketers; for if many Forex traders do the same, this may lead to a self-fulfilling prophecy of even greater tendencies.
-Figures graphs and indicators. It is certainly the easiest and most accurate method used by many traders to date.
-Cards and tools can hit sometime when a trend starts or ends. This will help the trader to plan profits and stop losses more accurately.
-If many retailers place stops at the same sites, this may reverse the price movement, as larger players in the market can deliberately stop these stops.
-The tools used are basic indicators. It can be risky assuming that current prices and trends predict future prices. They do it often, but not necessarily.
– Being completely on the charts means that you have no other signs that you can change the trend.
-Foundation analysis enhances the knowledge and understanding of the global market. So help us get a clear picture of the overall health of the world economy.
-We can use a basic analysis to explain the unexpected price movement. So, find out if prices move higher or lower.
-Major news can change the big price movement sometime when there is a big difference between expectations and real results. If you can predict and catch that price movement, it can be very profitable.
-Foundation analysis is best used to predict long-term exchange rate movement.
-There is so much information that can be confused.
-It is never difficult to use all the information to score a particular point of entry or exit to the trade.
-The short-term news release in the day may give a false signal and deceive the trader into opening the trade. This signal often develops a generational reaction in the market.
– Daily information or news can be priced in the market. Therefore, the information will not affect the price movement.
-It needs a person with some basic knowledge of economic background.
-News can sometimes cause a dramatic and rapid price movement as currency pairs go up and down as Forex markets try to swallow the news. Inexperienced traders can find themselves trapped in a chain of loss.
In my opinion, this is the best or best Forex analysis method that will guarantee 100% results all the time. Technical analysis and graphics will help short-term traders make their own decisions; long-term traders need to be informed about new currencies and data in trading countries. Note that these methods of analysis are simply tools. Using it properly can generally help you trade more efficiently. Therefore, most Forex traders use two analytical approaches to make trading decisions.