As a forex trader, you might have explored many strategies to gain best entry and exit points in forex trading. There are hundreds of strategies to explore. All these strategies fall under three types of analysis.
Technical analysis:
It is a very popular method of analysis among forex traders. It involves studying historical chart patterns to predict future price movements. It involves studying price action, using technical indicators, candlestick analysis, etc to gain high probable low risk entries to obtain a good
Fundamental analysis:
It involves studying the fundamental factors such as the GDP, Interest rates, inflation, etc. to know about the economy of the country. If the economy is doing well, then the currency of that will appreciate. For example, if the Fed hikes the interest rates, then the US dollar will appreciate in value. It is useful to find out the overall trend of a currency pair.
Sentimental analysis:
This is the most advanced type of analysis. It needs more experience. It comes from experience. Traders look for what the crowd is doing. They look for relevant data to find out the crowd sentiment and buy or sell accordingly.