Basically, forex trading is an art, in this case is the art of analysis. How can that be? Obviously a very able, each person / individual may produce art / style of trading that is different. In a sense even if you are learning forex at the same time, the results are not necessarily the same for every believer. And not necessarily the same even with the teacher himself.
Ability and analytical skills, will be one of the main factors of success or failure of a person in the world of forex trading. Good forex analysis will be able to always be consistent / repeating profit, and be able to survive in the long term if it can be forever.
Well let’s start learning the basics of forex trading analysis. Generally, there are two basic types of approach / analysis commonly used.
1. Fundamental analysis.
2. Technical analysis / technical.
Fundamental Analysis in forex trading
Fundamental analysis is a way of looking at the market through economic, social power, and political influence supply and demand. With the other words, you look good economic conditions, or conditions that sucks. Fundamental idea behind this analysis is that if a country’s economy is good, then their currencies will also be good. And result in increased confidence of other countries against currency.
For example, the value of the U.S. dollar continues to rise as the U.S. economy strengthened / improved. The consequences could be higher interest rates to control inflation, the dollar effect will also continue to strengthen.
The above is just one example to illustrate how fundamental effect on the value of the currency. For now we take the base line, that fundamental analysis is a way to analyze the market through the economic conditions of the country concerned.
Technical Analysis in forex trading
Technical analysis is the study of price movements in terms of mathematical analysis. From here we can imagine there will be graphics-and computation / mathematical formulas in it. With historical data and price movements now exist then the analysis can provide projections on which the value of the price will go up, down, or turn around. Or it could be called a ‘trend’, this is sought in technical analysis. By identifying trends or patterns correctly, it can help you find the best trading opportunities.
People say that in technical analysis, the trend is your friend. If you are able to recognize trends should your friend, then it will give the money (profits) to you.
Conclusion
Forex is like a big ball of energy that moves and flows, the ball there is a balance between fundamental and technical factors that play a role in determining where he will go, where the direction of the market. There is no element that can dominate up to 100%, be it fundamental or technical, even the forex market did not escape the law of nature.
In learning forex analysis, the same thing applies when deciding the type of analysis to be used. Do not rely on only one course. Instead, you must learn to balance the use of each of them, because that would make you really can get the most out of your forex trading.