Types Of Analysis

    There are two analytical techniques commonly used by traders to know and predict the movement of currency prices.

    a. Fundamental analysis (FA = Fundamental Analysis) Fundamental analysis takes into account various factors, such as a country's economic conditions, economic policy, good macro or micro. And here can be found the country's economic condition, whether healthy or not. Fundamental analysis is used to find out the valuation of currency, how much it was worth currency nominal valued compared to other currencies. In principle a Fundamental Analysis is used to determine whether a price is OVERVALUED (' expensive ') or UNDERVALUED (' cheap ').

   

    b. technical analysis (TA = Technical Analysis) technical analysis is a technique that analyzes price fluctuations of the currency in a certain span of time. And the movement will look certain patterns which can be used as a basis for making a purchase or sale. Basically technical analysis is used to determine whether a currency rates are already OVERBOUGHT (saturated buy) or OVERSOLD (saturated selling).

  

    You should be able to answer this question or specify a reason before deciding to open a position:

WHY DO I NEED TO OPEN

BUY POSITION I SELL NOW?

     According to my observation, more Fundamental Analysis gives the certainty of how the direction of currency prices. This is because Fundamental analysis based on observation data of real economic conditions. Fundamental analysis is usually used by traders with a long-term timeframe. Whereas technical analysis more widely used by traders with short-term time frame.

    Ideally you should master both techniques this analysis. But if many people understandably difficult to master both, because it takes ability and enough time. As an alternative, you can only master one first. As the emphasis is, if you are the type of long or medium-term trader you should master the Fundamental analysis. Whereas when you are a trader with short-term horizon then you should probably have to master technical analysis.

     This is actually an option. There are more than happy to use Fundamental analysis, and others prefer technical analysis. Both can complement each other.