Types Of Trading

Basically in FOREX there are two type of trading analysis theories: The fundamental analysis and the Technical analysis. There is continuous argument to which analysis is best when it comes to trading. To know which one is better let's take a look at both.

Fundamental Analysis

This kind of analysis has an economic, social and political approach to the market. These three has a great effect on the supply and demand of the each country.

A fundamental analysis has the idea of looking at the country's economic status, if the currency is doing well in their country or not. If a country has a better economic status then other countries they gain a trust with their currency.

The best example is the United States of America. They are gaining strong position because their economy is stable and strong. U.S. rates are increasing continuously as well as the value of their dollar.

This is what the Fundamentalists of Forex Market are analyzing.

Technical Analysis

This kind of analysis focuses on price movement. In simple terms, technical analysis means studying the charts.

A trader can analyze the prize movements based on its history and based on the price action as well. Traders can identify and try to predict the level to where the price will go.

By studying the charts you can now determine the trends and the patterns that can help you trade successfully.

In technical analysis the most significant factor that you can learn is the "trend". A lot of successful traders will tell you that the trends are their friends and so are you.

The reason behind this is simple, if you are able to identify a trend you will be able to make more money than those who do not know where the market is heading. At an early stage technical analysis can help traders determine where these trends are, hence, it can provide traders with better trading opportunities.

After exploring both trading analysis styles you might get confused which is the best? The answer is simple, neither of the two is better. As a successful trader you need both analyses.

You need to master both, the fundamental analysis and the technical analysis. You cannot take one and disregard the other. Both have significant values in determining your trading options. You can't decide when to trade at one point without analyzing the other.

Learn to incorporate both analyzes before you make your trade so you can have a better trading opportunities.

At first you might get confused and scared at trading but with these two types of analyzes you will not be blinded with what you are suppose to do.