In order to make wise trading selections, Forex Trading Malaysia https://www.fxcm-markets.com/forex/ must analyze market trends and economic factors. Technical analysis and fundamental analysis are the two main types of analysis that are used to direct traders. The fundamentals of each strategy are covered in this article.
In order to forecast future price changes, technical analysis entails examining previous price data and charts. Important ideas include:
Graphs: Traders use several chart types (line, bar, candlestick) to depict price changes over time.
Technical indicators that assist identify trends and probable entry/exit points include moving averages, the Relative Strength Index (RSI), and MACD.
Chart patterns: Shapes like triangles, double tops/bottoms, and head and shoulders can indicate probable trend reversals or continuations.
Economic data, current affairs, and geopolitical developments that affect currency prices are the subject of fundamental research. Key elements consist of:
Interest Rates: The choice of interest rates by the central bank can affect the strength of a currency.
Economic Indicators: Data on GDP, employment, inflation, and trade balance can provide light on the state of a nation’s economy.
Political Stability: Elections, political events, and geopolitical conflicts may all affect the value of currencies.
Technical and fundamental analysis are frequently used by traders to arrive at well-rounded trading conclusions. While fundamental research offers a wider economic perspective, technical analysis aids with short-term timing.