| Is it better to use fundamental or technical analysis with Forex trading? |
My answer to this question depends on your trading method.
As you already are aware, there are two primary forces acting in the Forex markets: fundamental data, which include such indicators as balance of trade data, money supply, interest rates, economic and financial reports, etc.; and technical data, which include such indicators as moving averages, average directional movement, stochastics, etc.
So, why should a Forex trading method be focused on technical indicators?
First, attempting to trade on fundamental data requires you to be available on real-time bases at whatever hour of the day or night that the news influences the markets, and, you must be able to act on that news before (predictive) or at the instant thousands of other Forex traders do (reactive), otherwise, you will have missed your opportunity.
Trading on fundamentals, as well, is less about the actual data itself and more about the market's reaction to that data. You rely here on the human factor that is not always very predictable.
Technical analysis, however, allows you as trader more time to make a smart decision.
Utilising technical indicators means the fundamentals are already reflected in the price of the market at any given instant.
While this means you are working more often with slightly lagging indicators, the advantages of using technical analysis mean that you spend less time identifying potential trades, and when you have identified a trend and look to enter a trade, you have much more data to support the trend's existence than if you are simply trading on the 'news'.
Furthermore, by using technical analysis and applying it through a trading method, you can trade the markets on your own terms, when you want to trade and how you want to trade them, without needing to grasp the minute details of what fundamental reports 'really' mean.
My Name is Pierre Pienaar, and I follow the Forex markets because it makes me money on a regular basis, and I write about the Forex to help Forex traders be successful. You can find out more about me at:
Xcellence Wealth Creator : http://www.linkedin.com/in/xcelwealth
Xcellence Profitable Forex Trading Tools: http://xcelprofitableforextools.blogspot.com/
Profitable Trading Plan: Click now http://adcurl.com/p41
Internet Million Dollar Opportunities: http://www.moneyexpertreviews.com/xcelwealthmilliondollars
Forex Profit Accelerator home study course... http://adcurl.com/aa53
Article Source: UnArchived Articles
|
|
|
|
