oussama94
05-28-2017, 23:21
T here are two major ways to analyze financial markets: fundamental
analysis and technical analysis. Fundamental analysis is based on underlying
economic conditions, while technical analysis uses historical
prices in an effort to predict future movements. Ever since technical
analysis first surfaced, there has been an ongoing debate as to which
methodology is more successful. Short-term traders prefer to use technical
analysis, focusing their strategies primarily on price action, while mediumterm
traders tend to use fundamental analysis to determine a currency’s
proper valuation, as well as its probable future valuation.
Before implementing successful trading strategies, it is important to
understand what drives the movements of currencies in the foreign exchange
market. The best strategies tend to be the ones that combine both
fundamental and technical analysis. Too often perfect technical formations
have failed because of major fundamental events. The same occurs with
fundamentals; there may be sharp gyrations in price action one day on the
back of no economic news released, which suggests that the price action
is random or based on nothing more than pattern formations. Therefore,
it is very important for technical traders to be aware of the key economic
data or events that are scheduled for release and, in turn, for fundamental
traders to be aware of important technical levels on which the general
market may be focusing
analysis and technical analysis. Fundamental analysis is based on underlying
economic conditions, while technical analysis uses historical
prices in an effort to predict future movements. Ever since technical
analysis first surfaced, there has been an ongoing debate as to which
methodology is more successful. Short-term traders prefer to use technical
analysis, focusing their strategies primarily on price action, while mediumterm
traders tend to use fundamental analysis to determine a currency’s
proper valuation, as well as its probable future valuation.
Before implementing successful trading strategies, it is important to
understand what drives the movements of currencies in the foreign exchange
market. The best strategies tend to be the ones that combine both
fundamental and technical analysis. Too often perfect technical formations
have failed because of major fundamental events. The same occurs with
fundamentals; there may be sharp gyrations in price action one day on the
back of no economic news released, which suggests that the price action
is random or based on nothing more than pattern formations. Therefore,
it is very important for technical traders to be aware of the key economic
data or events that are scheduled for release and, in turn, for fundamental
traders to be aware of important technical levels on which the general
market may be focusing