Market Analysis for beginners
- There are two main types of analysis that traders use to predict market movements and enter live positions in forex markets – fundamental analysis and technical analysis.
- A forex trader will tend to use one or a combination of these to determine their trading style which fits their personality.
1.Fundamental Analysis
What is Fundamental Analysis?
This analysis is interested in the ‘why’ – why is a forex market reacting the way it does? Forex and currencies are affected by many reasons, including a country’s economic strength, political and social factors, and market sentiment.
What is Technical Analysis?
When I explained what a Trading Strategy is based on in the Trading Basics series, I emphasized the three principles of Technical Analysis – do you remember them? They are:
- Market action (price) discounts everything
- Prices move in trends
- History repeats itself
It’s important to keep those principles in mind throughout the entire series of Technical Analysis basics.
Comments
Post a Comment