There are many types of Forex market analysis that will help your trader. To a novice Forex trader, analysis can seem like an obscure term. But in fact it falls into three specific forms.
Here are 3 types of Forex market analysis you can try.
1. Fundamental Analysis
Fundamental analysis is also used to analyze changes in the Forex market by monitoring of figures. For instance, interest rates, unemployment levels, gross domestic product (GDP), and other forms of economic data from countries.
For example, a trader performing a fundamental EUR/USD currency pair analysis may find knowledge about the Eurozone interest rates. It is more useful than those in the U.S. In addition, such traders would also like to be on top of any big news releases. It comes from each Eurozone nation to assess their economies’ health alliance.
2. Technical Analysis
The technical analysis comes in manual as well as automated systems. A manual method usually means a trader analyzes technical indicators and interprets those data into a decision to buy or sell.
An automated trading analysis means the trader “teaches” the program to check for certain signals and translate them into executing buy or sell decisions. Where automated analyzes may have an advantage over their manual equivalent is that they are supposed to take the behavioral economies out of commercial decisions. Forex systems use past market trends to decide where to go a given currency.
3. Weekend Analysis
There are two basic reasons for doing a weekend analysis. The first reason is that you want to establish a “big picture” view of a particular market in which you feel interest in it. Since the markets are closed and not in fluid flux over the weekend, you don’t need to respond to circumstances as they are occurring, but can survey the environment, so to speak.
Secondly, the weekend review will help you set up your trading plans for the week to come, and build the mentality you need. An overview of a weekend is analogous to an architect designing a plan to construct a house to ensure a smoother execution. Tempted to engage in trade without a plan? Bad idea: Hip shooting will leave a hole in your pocket.