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Posted on Feb 05, 2015 at 06:40 PM
Every profitable Forex trade placed lies in accuracy of its forecast. InstaForex has just made analysis easy for all traders
A successful Forex trader knows how to accurately forecast the behavior of the Forex market. She/he has learned to "read", group and analyze information, received from external sources. He/she knows how to determine whether to buy or sell a currency pair at a particular time.
Two popular methods of analysis are (1) Fundamental Analysis, and (2) Technical Analysis. The methods of analysis used to forecast the behavior of the Forex market varies among traders.
TECHNICAL ANALYSIS is a system that uses past price movement to forecast where a given currency is moving towards. The main tools technical analysts use are charts. Technical analysts use charts to looks at the price movement of a currency or security and uses this data to predict its future price movements; and this helps determine the future direction of the price movement based on historical data.
Technical analysis is built on three essential principles:
There are five categories in Forex technical analysis theory:
FUNDAMENTAL ANALYSIS is a method of forecasting the future price movement of a currency based on economic, political, environmental and other relevant factors and statistics that will affect the basic supply and demand of such currency or security.
Traders who prefer to to use fundamental analysis, will be reviewing the global economy news, careful studying them and the choice of the right algorithm of action. Events that happen in the world, influence position of the currency on the Forex market.
Many profitable trades are made moments prior to or shortly after major economic announcements. Fundamental analysis puts into consideration the following indicators:
It is not enough just to have the necessary data, it is also vital to have analytical skills to associate information and the possible consequences that it will cause. Analytical skills may be developed through constant trainings because only professionals can analyze the situation and make the most effective decision in a short period.
We cannot say that one is better than the other because some traders have accustomed their trading strategy to one particular method of analysis and as a matter of fact, have become successful in it.
The most effective option is to combine fundamental and technical analyses. Of course, it is quite difficult, but this will help you significantly increase chances to get stable income from trading on the currency market. Fundamental analysis is based on the search of the reason unlike technical analysis, that does not look for the reason but observes what is going on with the currency rate. Ð¢hus, both analyses are intended to complement each other.
It is quite difficult to analyze the situation on the foreign exchange market. To make the work of a trader more comfortable, InstaForex created a platform where expert analysts share their analysis with the rest of the Forex world. Here with InstaForex, you will be getting free and accurate analysis prepared by the leading Russian and Western analysts of Forex market. We place qualitative analytical materials, which can undoubtedly provide benefits to every trader.
Open an account now and we will subscribe you to InstaForex analytical reviews. You will surely enjoy using them regularly.
Recently, 7 analysts were awarded cash prizes of $45, 000. They contested in a campaign held by InstaForex and MT5 called Analyst of the Year. The analysts won by the number of votes they got from InstaForex clients and users of the portal.