Market analysis is an integral part of placing profitable trades, and the two basic forms of market analysis are technical and fundamental. Which of these two will work best for you? Well that depends on your personality, your tolerance for risk, your level of experience, the way in which you learn the best, and how comfortable you are with trading in general.
Technical analysis has to do with looking at the raw numbers of price data and forex charts to make a decision about where the market is and where it is going. There are many people that like to trade forex using a purely technical strategy, and technical analysis is especially favored by people who are into software programming because they can use it to create automated trading straegies.
Fundamental analysis is much further removed from price charts and has more to do with placing trades based on government policies, interest rates, and economic conditions and indicators. This is the method of choice for people who enjoy the thrill of day trading, and for those who have been trading the currency market long enough that they have honed a particular strategy for making money consistently and have no problems taking their emotions out of the equation.
The best advice for choosing which form of market analysis you will work with is to know yourself, what you are good at and where you might be lacking when it comes to your trading. If you find that you have trouble deciding when to exit the market, then technical analysis might be your method of choice because it comes with predefined exit parameters. If you have no problem exiting the market and feel comfortable locking in a certain number of pips on each trade (say 20), then fundamental analysis might be your best bet because this focus the most on when to get in, and when to get out will be determined by your own developed intuitive market sense.
Technical analysis has to do with looking at the raw numbers of price data and forex charts to make a decision about where the market is and where it is going. There are many people that like to trade forex using a purely technical strategy, and technical analysis is especially favored by people who are into software programming because they can use it to create automated trading straegies.
Fundamental analysis is much further removed from price charts and has more to do with placing trades based on government policies, interest rates, and economic conditions and indicators. This is the method of choice for people who enjoy the thrill of day trading, and for those who have been trading the currency market long enough that they have honed a particular strategy for making money consistently and have no problems taking their emotions out of the equation.
The best advice for choosing which form of market analysis you will work with is to know yourself, what you are good at and where you might be lacking when it comes to your trading. If you find that you have trouble deciding when to exit the market, then technical analysis might be your method of choice because it comes with predefined exit parameters. If you have no problem exiting the market and feel comfortable locking in a certain number of pips on each trade (say 20), then fundamental analysis might be your best bet because this focus the most on when to get in, and when to get out will be determined by your own developed intuitive market sense.
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