Every person who tried to make money on currency trading has no shadow of doubt that the Forex market in its volatility and turnover exceeds any stock, commodity, commodity or any other exchange. Every day, Forex traders have to monitor a large amount of various data, keep track of important news and compare information received from different sources with various forecasts, which often also contradict each other.
In order not to drown in the rapid flow of terabytes of information, to be able to highlight the main thing, investors use fundamental (it is also called macroeconomic or global) or technical analysis of the foreign exchange market, and most often their specific combination. The latter, in turn, depending on the indicators used, is divided into several subspecies, for example,
fractal analysis of the currency market, graphical method,
candlestick analysis, Eliot wave theory, etc. Each of them has its own positive aspects, and often traders use several types of different tools for more confidence in their forecast.
Fundamental is the analysis of the foreign exchange market, which is based on assessing the impact of the release of one or a whole package of macroeconomic news of medium or high importance. Often, people who have just installed a terminal for themselves cannot understand what caused such a lull in the market, and then they see a sharp surge, and the price soars to sky-high heights or falls to a monthly minimum. They think what happened? And it is in Cyprus that accounts were blocked or in the USA the latest report showed a significant increase in unemployment. The market reacts to everything. And therefore, an experienced trader before starting work looks in the economic calendar and notes for himself the hours when it is better to wait with the opening of the position, and when you need to be alert and seize the moment. Analysis of the foreign exchange market based on the publication of macroeconomic data is more suitable for investors with a medium and long investment period. Traditionally, such news includes an increase-decrease in the interest rate, unemployment and employment in the US, a report on GDP, a confidence index, balance sheet and some other news. As a rule, in the calendar they are marked with the highest priority, and they should definitely be taken into account in your trading system.
Analysis of the foreign exchange market, which is based on data on the current and past market conditions, is called technical analysis. Statistics for the trader plays a very important role, since it allows you to determine the trend, the estimated pivot points and the most suitable time for the conclusion of the transaction. Japanese candles, graphical figures, technical indicators, such as MACD, RSI, stochastics, fractals,
bollinger bands, moving averages with different calculation periods, have repeatedly proved their exceptional usefulness and are successfully used as the core of many trading systems. Trading work such an analysis of the foreign exchange market is generally carried out independently and can trade for days on end. Technical analysis is preferred by short-term players, those who trade on the daily, 15-minute or hourly chart.
As you have already seen, there are many ways to navigate the current state of affairs in the market, each of which is good in its own way, and there is no definite answer to the question of what to choose for yourself. However, there are still some recommendations on this subject. Regardless of what type of analysis will dominate your system, use one or more time-tested indicators, those that are very popular. Ultimately, the price will go where the formed majority of investors will drive it, and therefore it is better to look in the same direction, or in other words, at the same indicator that this majority focuses on.