Analysis

There are two types of analysis that traders use to enter market. Those are fundamental analysis and technical analysis.

Fundamental Analysis

Prices in the currencies market are affected by macroeconomic factors, such as inflation, unemployment, and industrial production. Information on events such as these is easy to find and are based on their analysis of economic data, which traders take positions on the market to make profit.

Fundamental analysts use economical data to predict market movement and to decide when is the best time to enter and exit from market.

Technical Analysis

Once a trader masters technical analysis, it is easy to apply it to any currency or time frame, and thus allowing a relatively short time to figure out where trends are going. Because of the short time, technicians can follow numerous currencies at the same time, whereas fundamentalists usually focus on one or two pairs of currencies, because there is so much information in the market to analyze.

Technical analysts use only graphical data shown on chart to predict market movement and to decide when is the best time to enter and exit from market.