I want your opinions. I am new to forex. Some of my fiends are using technical analysis to get their trade direction (as far as I'm concerned, their accounts are big and their trading level is high). What about fundamental analysis. It seems to me that the FA is just an occasional choice.
The better analysis
- Thread starter SammyLinh
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Hi SammyLinh. As you know, both technical analysis and fundamental analysis seek to determine future market direction, either up, side, or down. The only real difference between these two methods is that fundamental analysis looks at cause, whereas technical analysis looks at effect.
For example, if supply and demand are the underlying driving force behind price movements, and if prices rise when demand exceeds supply, fall when supply exceeds demand, and drift sideways when supply and demand are about equal, then the fundamental analyst will look at those factors likely to impact supply and demand, i.e. economic factors, etc., to determine likely future price direction.
The technical analyst, on the other hand, says, "Why go to all this trouble?" If a price chart shows prices rising, demand must be greater than supply, if prices are falling then supply must exceed demand, and if our chart shows prices drifting sideways, supply and demand must be equal. Everything we need to know about supply and demand is reflected in our price charts...if prices are rising we are buyers, if falling we are sellers, and if sideways we stay out.
A trader can spend considerable time performing fundamental analysis, because of the depth of research required to monitor economic factors on both sides of a particular currency pair, but fundamental analysis does not help much when timing trade entry. To say that economic factors suggest that the Aussie dollar will rise against the USD is one thing, but to say when this will begin is something else. A price chart and simple technical indicators will show you exactly when prices appear to be changing direction, allowing you to time your entry. Trust this helps you choose your method!
For example, if supply and demand are the underlying driving force behind price movements, and if prices rise when demand exceeds supply, fall when supply exceeds demand, and drift sideways when supply and demand are about equal, then the fundamental analyst will look at those factors likely to impact supply and demand, i.e. economic factors, etc., to determine likely future price direction.
The technical analyst, on the other hand, says, "Why go to all this trouble?" If a price chart shows prices rising, demand must be greater than supply, if prices are falling then supply must exceed demand, and if our chart shows prices drifting sideways, supply and demand must be equal. Everything we need to know about supply and demand is reflected in our price charts...if prices are rising we are buyers, if falling we are sellers, and if sideways we stay out.
A trader can spend considerable time performing fundamental analysis, because of the depth of research required to monitor economic factors on both sides of a particular currency pair, but fundamental analysis does not help much when timing trade entry. To say that economic factors suggest that the Aussie dollar will rise against the USD is one thing, but to say when this will begin is something else. A price chart and simple technical indicators will show you exactly when prices appear to be changing direction, allowing you to time your entry. Trust this helps you choose your method!
I think still many trader prefer use technical analysis with looking data that reflected on the cahrt as price movement history, using indicator as help tool also might will making being confident in decision making, and whatever type analysis that used, still important to keep strict money management
Fundamental analysis is a perfect tool if you are prepared to hold your position long-term.
Technical analysis can be a good tool for both short-term and long-term trades.
Both are great if you are using them right. Of course, you can combine both methods of analysis too. Just make sure you are using TA and FA correctly.
Technical analysis can be a good tool for both short-term and long-term trades.
Both are great if you are using them right. Of course, you can combine both methods of analysis too. Just make sure you are using TA and FA correctly.
Most trader still prefer use technical analysis than fundamental analysis because more simple than fundamental analysis because required many data as trigger and still need to filter information as reference trading decision, and technical analysis will look directly with the chart might with help tool like as use indicator
Forex is all about learning and experience. If you follow rules of Forex, you will never gonna fail in the business.
Analysis is the one very important part of trading. Every trader must have this skills so that he can understand the market flows and get idea how to trade according to market to get perfect profit from the market.
Making anaysis is very much important for all trader beacuse they will not only throw order like as throw coin, making analysis as trader wtill still look on support resistance area, they will use timeframe to analyze trend on timeframe, and also might will reading news update before making decision.
Right, To profit in trading, you must make recognize the markets. Once you know what you want from trading, you must systematically define a timeframe and a working plan for your trading career.
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Because as trader will get profit from difference price movement that occured in the market, so they must trade with trying to analyze the trend market with high accurate, knowledge and experience also might making trial and error might required to making better system trading
Traders using Technical Analysis follow charts and trends, typically following a number currency pairs simultaneously. Traders using Fundamental Analysis must sort through a great deal of market data, and so typically focus on only a few currency pairs. For this reason, many traders prefer Technical Analysis.
Also many traders choose Technical Analysis because they see strong trending tendencies in the Forex market.
Also many traders choose Technical Analysis because they see strong trending tendencies in the Forex market.
Fundamental, Technical, and Money Management analysis, can be (and often are) combined to form a single Forex trading strategy. Of the three, Money Management reigns supreme. You must have a money plan, and it must be unique to your tactical trading plan.
Why does Money Management reign supreme? Because regardless of the tactical trading method chosen, whether Fundamental Analysis or Technical Analysis, or both, or how badly a strategy might perform, a money plan can be tailored to return a profit. Very simply, if a strategy regularly losses 99 trades out of a hundred, the one winning trade needs to return one hundred times the average losing trade to breakeven. Terrible strategy, but at least you know why. You also know what needs to happen to make a profit.
With up-to-date performance data available, you can explore options for improving tactical strategy performance, in a way that specifically relates each tactical adjustment to a selected piece of performance data. This might be as simple as changing the period of a Moving Average to improve entry timing, or as complex as developing a completely new and revised tactical trading method.
So what comes first?
To formulate a money plan you need information on a strategy's trading performance. This is where demo trading pays-off. Testing a strategy delivers the critical data necessary to assess its feasibility, and in gathering those performance results critical to money management settings. The money plan will tell you things like how many lots you can trade, how many losses in a row you can sustain, the risk-of-ruin, and be able to adjust as fresh data becomes available, thus providing system
improvement input options.
In my opinion all the analysis should be part of your trading plan. So before you start trading, one should make a good trading which can have strict rules and all steps with proper analysis.
I always start my trading with proper planing. Without it, i can not survive in trading.
there is nothing to o with better analysis. its all about how and when you use them.Fundamental analysis is a perfect tool if you are prepared to hold your position long-term.Technical analysis can be a good tool for both short-term and long-term trades.
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