2 Types of Analysis Trading

In approaching Forex Trading, there are 2 basic types of analysis you can take viz:-

1. Fundamental analysis
2. Technical analysis.

There has always been a constant debate as to which analysis is better – both of Pros and Cons. You must need to know a little bit of both in order to fully understanding the market.

Fundamental Analysis

Fundamental analysis is a way of looking at the market through economic, social and political forces that affect supply and demand i.e. if a country’s economy is doing well, their currency will also be doing well. This is because the better a country’s economy, the more trust other countries have in that currency.

Technical Analysis

Technical analysis is the study of price movement. It has been shown that by studing the historical price movements, and, based on the price action, one can determine at some level where the price will go i.e. you can identify the trends and patterns to help you to find good trading opportunities.

So which type of analysis is better?

Both types of stong advocates. One is not better than the other. You need to know how to effectively use both types of analysis in order to help you to trade better to make good monies at the time.