Joined: 20 Nov 2018
|Posted: Tue Nov 20, 2018 1:28 am Post subject: forex analysis
|close debate about the best types of forex analysis has always been between fundamental and technical. Supporters of fundamental analysis argue that price movements are caused by economic conditions. While supporters of technical analysis assume that profits can only be achieved by observing price charts. But you know, actually there is one more type of forex analysis that is no less important, namely the analysis of market sentiment? To reveal the differences and determine which is the best forex analysis, let's first study the third understanding of the analysis.
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Defining the Different Types of Forex Analysis
Fundamental analysis examines the potential of price movements of various factors that can affect the fluctuations in currency values, such as central bank policies, as well as some economic data releases related to the economic conditions of a country, for example GDP (Gross Domestic Product), inflation, unemployment, and so on. Some extraordinary events such as natural disasters and political upheaval are also part of fundamental factors.
For example, traders who conduct a fundamental analysis of EUR / USD will base their observations on the ECB and Fed interest rate policies, as well as release high-impact economic data from the Eurozone and the United States. The existence of important events such as elections or even conflicts that threaten the stability of the US and the Euro Zone, is also an important consideration in conducting a fundamental analysis of EUR / USD.
On the other hand, Technical Analysis looks at the price movements seen on the price chart. Because it is applied with the principle that price movements are always repetitive, the purpose of this analysis is to recognize patterns of price movements in the past, as a basis for future price estimates and to look for ideal Buy and Sell moments. To perfect the analysis on the price chart, traders usually use certain observation methods, or even apply tools in the form of technical indicators.
Meanwhile, Market Sentiment Analysis deals with the consensus of market participants who predict the direction of price movements based on consideration of various things, including fundamental and technical factors. The three types of market sentiment that have been known in forex analysis are Bullish, Bearish and Neutral.