What to use technical or fundamental

[Norman2008]

How do you know what currency to buy or sell?
Both the technical and fundamental analysis are important when trading on the FX.

Fundamental components - Macro, Micro and Monetary


Macro - The big picture news and politics. Elections of a new government leader can have a real big impact on currency. Look at the trade relationship with another country. Are countries deflating their currency with the intent to increase, their exports.

Micro - Day to day activities, which are the employment rate, GDP and inflation data.

Do your homework and really uncover the data. You will need real hard data and not just a few days of news.

Monetary Interest Rates

The central bank sets the interest rate and the direction of the countries currency.With monetary it is important to know where the interest rates are going.

The technical indicators and principles such as Fibonacci Retracement, Candlesticks and oscillators analyze past price movement and the probability of a currency's future price direction.

What analysis and or charts do you use for trading?
Forex Trading Articles, Audios, News and Tools - Forex-Money-Exchange.com

Tracy Lenyk

[frensisca]

Either Technical or Fundamental analysis can be used in the forex market. Traders can make legitimate cases for either, and many will incorporate both into their strategy.


Proactol Review

[CHRISTINAfx]

Pretty much the fundamentalist studies the cause of market movement, while the technician studies the effect. Traders should understand them both in concept, even if then they are gonna focus on one of them. just in order to understand the analysis or forex articles…
Regards!

[kris]

I'm curious as to how many traders actually trade pure fundamentals, because the market deviates from fundamentals so often. As for me, I use fundamentals to give me an overall directional bias, but I make sure to look very carefully at sentiment before entering.


Kris

[Somya Gabriel]

It is very important to maintain an equilibrium between Fundamental and Technical Analysis. A trader should smart enough to make trading decision based on both the analysis. You can never rely upon one single analysis, as forex is a highly volatile market and both the analysis have a great impact on it.

[wassabi]

Somya, I agree with your view; traders must merge the technical with the fundamental analysis.

[Somya Gabriel]

Though saying that a balanced equation should be maintained in using both the analysis, i found many traders using the Technical analysis more often. Technical analysis is easier to learn than fundamental analysis. It takes years of experience to understand fundamental analysis of forex markets to be a very successful trader. Young traders like to make use of computers to derive charts and technical analysis and mostly rely on them.

[Mark27]

I think both are very essential.

[amna.joseph]

Yea, a balance between two is essential.

[kris]

Many people here mention that "a balance between the two" is helpful in trading, but I'd like to spur some discussion: specifically how do traders here balance between the two? For example, I use fundamentals to establish a direction and technicals to get entries. This helps me avoid a lot of false moves. Anyway, thought it would be useful to encourage discussion of this topic.

Kris