Type of Analysis

There are two principal and confronting schools in Forex analysis – the fundamentalists and technicians. Both are supposed to be right. Sometimes technicians are more successful, other times the fundamentalists are gaining more profit. And usually when one group of analysts makes a mistake the other surely says, “We told you so.” So, which one to chose? There are many possible answers to that question, and three of them are the most popular.

If you are a “long-term” Forex investor in search of enterprises with big capital, growth and income potential, the fundamentals are better. If you are a “short-term” Forex investor, or a Forex market trader, in search for companies who are “on the verge” of being discovered, fundamentals will be better. If you are a “long-term” investor who is not as concerned about one company’s basics because you will diversify to minimize risk, or you are a “short-term” investor waiting for investor sentiment to change, then technical analysis will be useful for you.

Nowadays many traders use both fundamental analysis and technical analysis. The technicians tell you about the broad market and its trends. The fundamentalists tell you if an issue has the “basics” for reaching your investment goals. Fundamental and Technical analysis are different in many points. There isn’t clear answer, which method has gained more profit during a definite period of study. It’s better to use the best ideas from each side. Then the result will be impressive.