FOREX MARKET ANALYSIS

MARKET ANALYSIS

Forex Market analysis is the study of determining whether to buy, sell, or wait on trading a currency pair. Currencies trade in pairs, with the exchange rates based on the price of one currency.

TYPES OF MARKET ANALYSIS

There are three types of market analysis:

1.Technical Analysis.

2.Fundamental Analysis.

3.Sentiment Analysis .

 

1. TECHNICAL ANALYSIS:

Technical analysis is the framework in which traders study price movement. And once your analysis is correct though no analysis or trade setup is 100% correct so once your analysis is correct it will correspond with the upcoming News or event.

2. FUNDAMENTAL ANALYSIS:

If you like analyzing social, economic, and political factors that affect currency supply and demand, then fundamental analysis is for you! I.e fundamental analysis mostly deals with trading an upcoming  news events. some traders are good with trading news.

3. SENTIMENT ANALYSIS:

Sometimes it’s not always about the numbers, but how market players feel…how do you figure out and trade forex off  that?
most trades don’t trade Sentimentals.

WHICH TYPE OF ANALYSIS FOR FOREX TRADING IS THE BEST?

In order to become a true forex master you will need to know how to effectively use these three types of analysis. they most importantly is to know when news that will drive market/price will come and analyze your trade properly

 

Throughout your journey as an aspiring forex trader, you will find strong advocates for each type of analysis.

Whereas technical analysis (TA) involves poring over charts to identify patterns or trends, fundamental analysis (FA) involves poring over economic data reports and news headlines.

Hardcore traders in the technical analysis camp scream, “Fundamental analysis doesn’t matter! FU to FA! It’s already embedded in the price, which you can see on the charts!”

Hardcore traders in the fundamental analysis camp scream, “Technical analysis is just a bunch of imaginary lines and drawings! TA is BS!”

While folks in the sentiment analysis camp are….observing the two camps fight and monitoring their level of sentiments of each other!

*Fortunately, the different types of market analysis complement each other.*

Even hardcore technical traders may find useful fundamental nuggets that can help with their technical analysis. And vice versa.

In real-world markets, prices are constantly changing, and usually develop trends. Those changes in prices can and do affect fundamentals.

This means that trends in prices affect fundamentals just as fundamentals affect prices.