Forex Analysis : Technical or Fundamental ?

There are two kinds of analysis in the forex market, technical analysis and fundamental analysis. Technical analysis is based on observations with analysis tools such as forex indicators, EA (Expert Advisor) or robot.

While fundamental analysis based on observation of market conditions which affected by macro-economic factors, political or other events directly or indirectly.

So which one is the best? Good question!

Technical analysis

Many of the tools that we can use to analyze market price movement technically. Mostly we can get them for free, others must be purchased. In addition, this tool can be set according to the desires and our own trading style.

•  Forex Indicators

These tools still require further analysis from us. This means that this tool only provides numbers based on previous market price movements. For example : Pivot, Resistance & Support, ADX, Moving Average, Ichimoku, Bolinger Bands, Parabolic SAR. Then how to choose a suitable indicator for us? Will be discussed in a later article. 

• Expert Advisor (EA) and Robot
  What is needed to use the Expert Advisor (EA) are just some of the input data (parameters) in numbers. Furthermore, EA will automatically execute the open position according to the parameters that we have entered earlier. Almost same with forex indicators but you can own these tools by purchase them. However many also give EA for free. Just install, set up and wait for the results.
  
  
  

  Fundamental Analysis

  Fundamental analysis is preferred by "long-term trader". This means that traders trade in a period that exceeds 48 hours, could be a week, two weeks or a month. Of course with more investment capital, more profits that can be obtained but also have more risk of loss.

  What are the economic news that influence fundamental analysis?
  

  
  

  
  

  Non-Farm Payroll/NFP (US Economic News)

  Why so important? There is an important adage " if the U.S. economy ill, the other country economies would be a fever".

  Non-farm payrolls is the number of wage employment data from non-agricultural sector who work either full time or part-time that receiving wage / salary in more than 500 private and public companies in America. Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.

  
  

  GDP (Gross Domestic Product)

  The total market value of final goods and services produced by a State. So GDP is a measure of a country's economic performance. The better the value of GDP, economic performance become more better and the rate of currency exchange also increase.

  
  

  Trade Balance

  Net excess of the value of exports and imports of goods and services of a State within a certain period. If the value goes up or positive, then the exchange rate of the country's currency tends to rise.

  
  

  Un-Employment Data

  The number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. The higher of unemployment data will affected the economic performance become lower and the rate of currency exchange also decrease.

  
  

  In addition to the above data, economic data that become reference fundamental to a trader are Interest Rates, Consumer Price Index, Manufacturing Data etc.

  

  So which one is more suitable and relevant for you? Technical or Fundamental? Or a combination? The answer to this question can you get it yourself if you've jumped into forex market.

  
  

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