Every person who tried to make money on currency trading has no doubt that the Forex market is more volatile and turnover than any stock, commodity, commodity or any other exchange. Every day Forex traders have to monitor a large amount of diverse data, monitor important news and compare information received from different sources with different forecasts, which often also contradict each other.
In order not to drown in a turbulent flow of terabytes of information, to be able to distinguish the main thing, investors use the fundamental (it is also called macroeconomic or global) or technical analysis of the currency market, and more often their specific aggregate. The latter, in turn, depending on the indicators used, is subdivided 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 to increase confidence in their forecast.
Fundamental is called the analysis of the currency market, which is based on assessing the impact of the output of one or a whole package of macroeconomic news of medium or high importance. Often people who have only established a terminal can not understand what caused such a lull in the market, and after they see a sharp surge, and the price soars into the clouds or falls to a monthly low. They think, what happened? And this in Cyprus blocked the account or in the US the latest report showed a significant increase in unemployment. The market reacts to everything. And so an experienced trader looks at the economic calendar before starting his work and notes for himself the clock when it is better to wait and when to open the position, and when you need to be alert and catch the moment. The analysis of the foreign exchange market based on the publication of macroeconomic data is more suitable for investors with an average and long period of investment of their funds. Traditionally, such news include an increase-decrease in the interest rate, unemployment and employment in the US, GDP report, confidence index, balance of the balance sheet and some other news. As a rule, they are marked with the highest priority in the calendar, and they must be taken into account in their trading system.
Technical analysis is called the analysis of the currency market, which is based on data on the current and past market conditions. Statistics for the trader plays a very important role, because it allows you to determine the trend, the expected reversal points and the most appropriate time for the conclusion of the transaction. Japanese candles, graphic 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. Trade work such analysis of the currency market in general is carried out independently and can trade day and night. Technical analysis is preferred by short-term players, those who trade on a daily, 15-minute or hourly chart.
As you have already seen, there are many ways to orient in the current state of affairs on the market, each of them being good in its own way, and there is no definite answer to the question of what to choose personally for yourself. However, in this respect, there are still some recommendations. Regardless of what kind 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 majority of investors will drive it, and therefore it is better to look in the same direction, or in other words, to the same indicator that this majority is targeting.