Technical Vs Fundamental Analysis



The traders make decisions using a two-Analysis of Technical Analysis (Technical Analysis) and Analysis of Fundamental (Fundamental Analysis).
Technical Analysis (Technical Analysis) using charts, trend lines, indicators such as Moving Average, Moving Average Convergence Divergence (MACD), Relative Strenght Index (RSI), Bolinger Band, Fibbonaci, Camarilla, Pivot Point, pattern / candlestick patterns and mathematical analysis others to study the market opportunities.
While Fundamental Analysis (Fundamental Analysis) to predict price movements by translating various information on economic conditions, including news, reports and policies issued by the government, and also the rumors.

Technical Analysis (Technical Analysis) and Analysis of Fundamental (Fundamental Analysis). Which is better?
Let us go back to basics of forex trading. Does that cause price movements?
The answer is: Hope and speculation of the market! News is not the cause of price movements. On the other hand, the indicator / mathematical calculations nor is driving prices.

On Technical Analysis (Technical Analysis), when a trader based on the graph, for example the trend line and the MACD lines have shown that the price has crossed the line trend line and the MACD lines have intercepts. And if then the price rises, this does not mean that the pattern of these indicators which causes movement of the price! But because many traders perpatokan on these lines. At that time, they did the same thing (buy / LONG) according to the theory of the indicator concerned. This is what causes prices really go up according to the prediction of the indicators.
Essentially, the indicator is only as a follower / disciple and not as causes of price movements.

On Fundamental Analysis (Fundamental Analysis), a drastic price movement occurs when there is events in unexpected ways. These events can include the increase / decrease in interest rates from central banks, to political events or wars. Examples are the events 9 / 11. When the events 9 / 11 happened, because the rate of USD to weaken everyone predicted the event would have a big impact on the U.S. so it is probable USD weakened. This incident caused many market players to sell USD. EUR rate impact really plummeted.

The real question is how much money is traded based on Technical Analysis (Technical Analysis) and Analysis of Fundamental (Fundamental Analysis)?
In general, large banks, hegde fund, and the other big financial institutions on the basis of Fundamental Analysis (Fundamental Analysis). And because they are the holders of most currencies around the world, then if they do trade, then the price will move in accordance with what they do. This is in accordance with economic laws, for example when there are many buyers of USD, then the amount of USD in circulation on the market will be reduced, causing the price of USD rises.

What about the traders-traders who use Technical Analysis (Technical Analysis)? They certainly do not have as much money as the number of financial institutions at the top (although the combined total). Plus the variety of technical indicators and hundreds of different timeframes. These indicators and timeframes cause each TSB produces highly varied predictions.

Tips for traders that use Technical Analysis (Technical Analysis) and Analysis of Fundamental (Fundamental Analysis)
For those of you that use Technical Analysis (Technical Analysis), the tips that we provide are: Just use common indicators that are widely used by traders and trade only when there is no important economic news.
For those of you that use of Fundamental Analysis (fundamental analysis), the tips that we provide are: patience, discipline, only trade when there are important economic news and make sure the time / hour you're using is absolutely right.




 

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