Learn Forex Trading – Fundamental Vs Technical Analysis

Published: February 16, 2009

If you ready to learn Forex trading, it is important to learn which style of trading most closely matches your investment style. Learning how to trade Forex requires different strategies and trading techniques than traditional stock markets. There are two primary styles that traders use to trade Forex; fundamental and technical analysis. Consider which style represents your style, as this is the first step to take as you learn Forex trading.

Fundamental Analysis

Fundamental analysis involves basing the valuation of currency on economic reports and other important economic indicators. Traders who utilize this technique review a country’s gross domestic products, interest rates, news releases about the nation’s economy and unemployment rates to determine how to trade various currencies. When you learn Forex trading based on fundamental analysis, you will want to select a firm that provides ongoing, accurate and easy to access research on these important fundamental indicators.

Technical Analysis

When a Forex trader utilizes a specific system to execute trades, it is referred to as technical analysis. As you learn forex trading, you will begin to develop your own indicators, your own trading style and your own reporting system. Most traders who utilize technical analysis for their trading decisions will leverage a Forex software system. While a trader could work on a manual system, a software program will offer a more cohesive method for tracking and organizing crucial trading data. As you learn Forex trading, be sure to inquire into research and tips from the firm you are placing trades through.

As a trader begins to learn Forex trading, they are often attracted to technical analysis as trends are easy to find, charting is made simple through a software program and patterns are more easily noticed than with the fundamental analysis approach.

Both trading techniques offer advantages and disadvantages that will appear to a variety of investors.

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