In forex trading, you must do the analysis. There are two types of analysis that you can do when doing forex trading. The analysis is technical analysis and fundamental analysis. Then, what is the difference between these two analyzes? Here is an explanation of both the forex trading analysis.
- Fundamental Analysis
This forex trading analysis is based on several important things. For example, the rise in world oil prices, changes in US central bank decisions related to interest rates, and other things. That is what is called fundamental. With the changes, it will also affect the price movement in the forex market using trading tools. In essence, all the movements that exist in forex trading is strongly influenced by what is done or decided by the government. In addition, the market response to government decisions is also an important element in fundamental analysis. If observed, it is true if news of changes made by the government will move the price in forex trading. In fact, news that will still appear only and not really happen can affect the movement in the world of forex trading. So if there is a change in government decisions, also change the price of the currency. The ups and downs of the currency price will depend on what decision is made and the market reaction to the decision.
- Technical Analysis
If you are a forex trader based on technical analysis, then you believe that predictions can be made based on past data. That means you can learn about movement data in the past. After studying the movement, you can make predictions about what you should do with your forex trading. With the provision of past data is expected to predict you more accurately and ultimately get the maximum profit. Specifically, you will analyze some things like price, volume, and open interest data. With the analysis you can predict the price to come. To make it easier for you to analyze the data, usually the data is presented in graphical form. Although it just looks like a regular prediction but this technical analysis uses mathematical formulas and pattern recognition. may be useful.