If you are a new forex trader (Forex), technical analysis of Forex may seem rocket science. You can even make a mistake with this for fundamental analysis. Though both will require critical thinking, however, they have a soup & # 39 objective and a & # 39 objective located at the opposite end. Understanding how Forex works and how the two types of analysis can be done better to help you achieve success in Forex trading.
What is Forex?
As with any investment, you should know which product or security you are dealing. In this case, you are dealing with a foreign currency, you can buy or sell, make a profit, based on the changing values. The truth is that trading foreign exchange can be very risky. This is because they can in a short period of time to change their values. But if you are smart enough to analyze trends, you can get the most profit from it.
Fundamental analysis in foreign currency
Because the risk is great when dealing with a foreign currency, it is important to have some sort of prediction techniques. In this case, the various forms of analysis can help you predict how the currency will run. For example, fundamental analysis uses politics, economics and sudden events, and then on the & # 39; combines these factors to make the overall situation. Trader considering the overall situation and predict how this situation will affect the currency. For example, when a nation loses its leader, the currency that people can suddenly drop in value.
Technical analysis in foreign currency
Forex technical analysis is not engaged in the situation, and the raw, neematsyyanalnymi data. Rather than read the news, the trader examines the recent history of a currency value. The trader can even see for months & # 39; worth the value of currency, if he or she wants to see the big picture. Then he or she will build graphs based on the data, to make progress and the trend is easier to read. With the help of indicators such as moving averages and Bollinger bands, the trader will notice a pattern or trend. It can also be recognized when the currency is experiencing a deadlock. A dead end or a stay in a state of congestion means that the currency is fixed within a small range. This may mean that a currency with a low risk or not much can earn by selling this price.
Advantages technical analysis Forex
For some pros Forex technical analysis can be self-sufficient with projections and future trends. Thanks to the Forex technical analysis, you do not need to become an economist and political analyst, you just have to be a Forex trader who can write and read charts. With the help of graphs you can already see what will happen tomorrow or next week. However, you have to work with the knowledge that even the Forex technical analysis can be erroneous. But at least it can give you a lot of support when dealing with a high security risk, such as currency, what is better than to fumble your next shopping step.