Understanding Fundamental and Technical Analysis in Forex Trading

Successfully trading in Forex requires understanding how to analyze the market. This is done using two methods: Fundamental Analysis and Technical Analysis. Here’s what these terms mean and how to use them to trade better.

  • Fundamental Analysis: This method involves analyzing a nation’s economic, social, and political situation to determine the value of its currency. A nation with a strong economy will have a currency with a higher value, while a nation with a weaker economy will have a currency with a lower value.
  • Technical Analysis: This method involves analyzing the price movements of a currency pair to determine the best time to invest. One important factor to analyze is the trend, which indicates whether the currency is continually rising or falling in value. Following the trend can lead to profits in Forex trading.

To succeed in Forex trading, understanding both Fundamental and Technical Analysis is crucial. With these techniques, traders can gain an edge over others and the market, earning a continuing profit.

Written by Coast Dwane

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