Forex Analysis: Which Method Is Better?
Fundamental and technical analysis are the two main accessories used in the foreign exchange market.
1. The method of analysis that concerns itself with assessing the nature and the results of socio-economic and political undercurrents on the FX market is called FUNDAMENTAL ANALYSIS.
2. When the analysis is concentrated specifically on the use of charts and graphs to study price movements and to point out trends, this is called TECHNICAL ANALYSIS.
So which is the more suitable method? If you check out forums and websites you will see many traders decidedly supporting one or the other. Those who like to lean on charts will tell you that the only way to make money with currency trading is to find out trends and jump onto them as quick as possible.
However, those who approve fundamental analysis will maintain that the only drivers of the market prices are socio-political and economic aspects, a fact that has been proven time and again in most of the movements. They break down that any association between the charts and real time movements are only by chance.
This though, is not a foregone conviction. While the vast influence on the forex market, of variations in the economic and politcal scenes, cannot be denied, patterns or trends could possibly be gathered from price movements expressly in the wake of announcements or during periods with no big announcements.
If on the other hand you rely completely on your charts, you are likely to be caught out when a preeminent financial event such as an interest rate change is unanticipatedly announced. You were not giving consideration to the financial news and left a trade open at the wrong moment. That may result in calamity.
The opinion therefore is that short term trading can benefit from characterizing trends via technical analysis while the large price movements are typically created by socio-economic or political elements. Keeping both eyes open is the more frugal method as it equips one to use mathematics to predict short term movements while monitoring current news and happenings that would effect movements on a longer term and greater eminence. After all money in the currence market is made when one executes trades based on predicted movement and that prediction comes to pass.
FX market movements are a bit like elastic that can stretch in one way or another and then fall back, although not always to its opening position. The fundamentals are the factors that cause it to stretch. Technical analysis portends how far it will swing in each direction before reversing.
So when you want to profit from foreign exchange trading it is better not to let your concentration to become fixed on either one. You ought to learn to balance the use of both forms of foreign exchange market analysis to make steady profits. - 23229
1. The method of analysis that concerns itself with assessing the nature and the results of socio-economic and political undercurrents on the FX market is called FUNDAMENTAL ANALYSIS.
2. When the analysis is concentrated specifically on the use of charts and graphs to study price movements and to point out trends, this is called TECHNICAL ANALYSIS.
So which is the more suitable method? If you check out forums and websites you will see many traders decidedly supporting one or the other. Those who like to lean on charts will tell you that the only way to make money with currency trading is to find out trends and jump onto them as quick as possible.
However, those who approve fundamental analysis will maintain that the only drivers of the market prices are socio-political and economic aspects, a fact that has been proven time and again in most of the movements. They break down that any association between the charts and real time movements are only by chance.
This though, is not a foregone conviction. While the vast influence on the forex market, of variations in the economic and politcal scenes, cannot be denied, patterns or trends could possibly be gathered from price movements expressly in the wake of announcements or during periods with no big announcements.
If on the other hand you rely completely on your charts, you are likely to be caught out when a preeminent financial event such as an interest rate change is unanticipatedly announced. You were not giving consideration to the financial news and left a trade open at the wrong moment. That may result in calamity.
The opinion therefore is that short term trading can benefit from characterizing trends via technical analysis while the large price movements are typically created by socio-economic or political elements. Keeping both eyes open is the more frugal method as it equips one to use mathematics to predict short term movements while monitoring current news and happenings that would effect movements on a longer term and greater eminence. After all money in the currence market is made when one executes trades based on predicted movement and that prediction comes to pass.
FX market movements are a bit like elastic that can stretch in one way or another and then fall back, although not always to its opening position. The fundamentals are the factors that cause it to stretch. Technical analysis portends how far it will swing in each direction before reversing.
So when you want to profit from foreign exchange trading it is better not to let your concentration to become fixed on either one. You ought to learn to balance the use of both forms of foreign exchange market analysis to make steady profits. - 23229
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Forex trading requires knowledge of japanese candlesticks charts. Forex markets move quickly, get forex trading training to keep on top of it.
posted by X - Men @ 3:42 AM
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