Forex Trading Technical Analysis versus Fundamental

All traders today have a massive wealth of information and Forex traders are just as equipped to evaluate and pick viable trades. When evaluating data forex trading technical analysis versus fundamental analysis some may argue there is too much information. Both methods of evaluating data are different: fundamental analysis looks at money supply, interest rates, balances of trade data, financial, and economic reports.

There are many traders who trade on fundamental data, however this is extremely difficult as it takes so much time and requires much economic knowledge. The average trader just does not have the time to put into this kind of analysis a new trader has less than an hour a day to trade Forex.

If you trade fundamentally you will need to be around your computer when a news event is about to take place and always trying to play catch up. It’s too hard to be always on like a mad day trader and if you are chasing news events you are chasing. If you can’t get to your machine in time then you can get rocked hard. Not to mention all the surprise news reports to hit the wire.

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The markets always require news and information from all over the world and the markets are always reacting to it day and night every minute. So when you are working on this forex trading technical analysis versus fundamental keep this in mind.

Fundamental analysis trading means you must understand that it is not the data that is important and only the reaction to this data that is of importance. Almost all fundamental data is in the market already and news just confirms this. So you must time these events if you trade on fundamentals and the market may swing in reaction giving you short term wins or loses.

On the other hand you have technical analysis which has much more flexibility in the markets. TA as it is known is said to reflect the fundamental analysis in the market price. So let the market do the fundamental work and you just ride the trends it projects from the specific conditions of the events in the news.

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If you use TA properly with the right methods you can enter, ride trends with time to make profits and exit when the trend confirms it is nearing an end. Both entry and exit of trends will be shown in the price action of the Forex markets and will dictate the next moves to make.

TA is far less demanding and a much better way of trading Forex with greater chance of making profits in this exciting market place. Remember this when you study the forex trading technical analysis versus fundamental.