Technical or fundamental analysis

For many years, there has been a dispute between traders about what was originally and what is more important, technical or fundamental analysis. This dispute is like a discussion between idealists and materialists about what is primary. Before every newcomer to the currency market Forex sooner or later this question arises. Seasoned traders, both successful and not so argue that technical analysis in the study is much simpler than the fundamental one.

The statements of experienced traders have objective evidence of this. For highly effective use of fundamental analysis, the trader will need to spend a large amount of time and effort to obtain economic knowledge that can be obtained only in economic schools or in higher education institutions.

There are very few books on fundamental analysis. If the information is there, then it is very scarce and affects only general concepts. Therefore, traders have to read special books on macroeconomics and economic theory to study this type of analysis. This is not an easy task, as the materials need to be applied for the foreign exchange market.

In connection with these difficulties, many prefer technical analysis to fundamental analysis. Books on technical analysis of a great variety, tools, including a large number of indicators, can also be found in the public domain. And the technical analysis itself is much easier to understand than the fundamental one.

Traders who are engaged in fundamental analysis are constantly forced to follow a variety of political and economic news, as well as various events that may affect price changes on a particular currency pair, i.e. actually follow the life of two, and if the currency is Euro, then several countries. After leaving a few days from the fundamental analysis, you can miss some significant events that can significantly affect the behavior of the currency.

Let’s summarize. Ideally, it is better for each trader to have both types of analysis, but this is not always possible. Therefore, if you prefer Fundamental analysis, then you need to study at least the basics of technical analysis in order to open an order at the right moment. If you prefer Technical Analysis, then you also need to know something about fundamental analysis, at least the time of news release, because at this time the market may not behave predictably for you.

For a trader taking the first steps on the Forex market, it is preferable to start studying technical analysis. This is an easier exercise, so for a start it will be most justified and you will not waste your time and learn how to predict market behavior with the least effort.

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