Forex analysis

Speaking on the whole there are two main directions in Forex analysis. These are technical and fundamental analyses. Much was said and written about both directions. So let us mention here only main points concerning each direction..

Fundamental analysis:

Classic of Forex literature J. Murphy said: “Fundamental analysis studies economic forces of supply and demand which cause variation in prices, i.e. make them go up or down or stay where they were”. .

Fundamental approach implies the analysis of all the factors which influence this or that way price of an article of trade. Such analysis lets to determine intrinsic or actual value of goods..

According to fundamental analysis there are the following basic groups of factors which influence the market:.

political

economical

rumours and expectations.

Technical analysis:

J. Murphy says: “Technical analysis is the study of market dynamics, often through charts for the purpose of forecasting future price trends”. He also formulated three postulates which serve as a base for technical analysis..

The market considers everything;.

Prices move in accordance with trends;.

History repeats itself..

Summing up all we’d like to add that fundamental analysis is used as a rule when working in long term period, and it’s more often recommended to use technical analysis when working in short term period..

Forex analytics
What's Forex market?
Forex strategies