Forex analysis is a type of analysis that retail Forex trader used to find out potential buy and sell signals on currency pairs. There are two types of Forex analysis: technical analysis, fundamental analysis. When the analysis is made by using tools and charts then that analysis is considered as technical analysis. On the other hand, when only financial news, reports, announcements are used to find out a potential entry point in the market then it is called fundamental analysis. So if anyone asks me which analysis is best then there is no good answer from it because you cannot ignore any of them if you want to do something in this market rather than losing your money.
Types of Forex Market analysis
Financial analysis is mainly two types but there is another one that may come handy in your trading career. We are going to talk briefly about this type and will suggest you a best analyzing system.
Fundamental analysis is based on COT reports, interest rates, employment rates, gross domestic product (GDP) growth, and other financial data that publish from countries. This type of analysis is good for predicting big movements in any currency pair ad it is also good for long time trade and if you are a day trader then this analysis might not come handy for you.
In technical analysis, the analysis purely depends on the chart rather than any news or announcement. Traders use several indicators and tools to finding out potential buy or sell signals and they act accordingly to it. It is the most popular analysis and it is good for short time day traders and scalpers who would like to get fast results from their trades. People in Australia often trades the bond market with Saxo just with the help of technical analysis. But to get a perfect result, it is better to sync the technical data with the fundamental factors.
Weekend analysis can help you to take your trading career into the next level and there are two vital reasons why you need to consider this analysis. Firstly you can see the whole market and analyze it in a fixed position during the markets weekend when there is no change in the market. You may review your trading journal in this time and you may find what gone wrong that time as you lose few trades. And secondly, you can predict the market how it may change next week and can make a plan in advance in which places you might think about opening positions.
The best method of trading analysis
If you want to make a career in the trading industry then there is no other option than learning and having a clear knowledge about this three type of analysis and if you can combine these three then it will give a much better result from your trading. Most of the traders try to emphasize more in technical analysis because it is quite easier to predict the market by using tools and indicators and they often ignore the fundamental analyzing part and often caught in the moment. Because if any financial announcement or news publishes then the market does not follow any technical tools or indicators and it just flies like a bird. So we suggest you have knowledge about fundamental analysis and consider it when you are making any trading decision. But fundamental analysis is really useful if you want to trade in breakouts and if you want to predict if the trend is going to continue or change. Technical analysis can be handy if you are a day trader and like to get results before ending your trading day but if you want to earn more and want to keep your trade open for a longer period then you have no other option then giving priority to fundamental analysis.
In the end, we want to suggest that you have to give priority to both technical and fundamental analysis along with the weekend analysis if possible, and only then you might conquer something from this market. This is the only best option we can suggest to you for having a profitable trading career.