Technical Vs Fundamental Analysis

The traders make decisions using two analysis of Technical Analysis  and Analysis Fundamental . Technical Analysis  using charts, trend lines, indicators such as Moving Average, Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), Bolinger Band, Fibbonaci, Camarilla, Pivot points, pattern / candlestick patterns and mathematical analysis others to study the market opportunities. While Fundamental Analysis  to predict price movements by translating various information on economic conditions, including news, reports and policies issued by the government, as well as rumors.
Technical Analysis and Analysis Fundamental (Fundamental Analysis). Which is better? Let us return to the basics of forex trading. What causes price movements? The answer is: Hope and speculation from the market! News is not the cause of price movements. On the other hand, the indicator / mathematical calculation is not a price mover.
On Technical Analysis , when a trader based on the graph, as an example of the trend line and the MACD lines have shown that the price has crossed the line trend line and the lines on the MACD has intersection. And if then the price rises, this does not mean that the pattern of these indicators which causes movement of the price! But because many traders perpatokan on these lines. At that time, they do the same thing (buy / LONG) according to the theory of the indicator concerned. This is what causes the prices really go up according to predictions from indicator. In essence, the indicator is only as a follower / disciple and not as a cause of price movements.
On Fundamental Analysis , a drastic price movements occur when there are events that are unexpected. These events can include the increase / decrease in interest rates from central banks, to political events or wars. Examples are the events of 9 / 11. When the events of 9 / 11 happened, rate USD weakened because every people estimate the event will significantly affect the U.S. so it is probable USD weakened. This incident caused many market players to sell USD. Impact USD rate actually dropped dramatically.
The real question is how much money is traded based on Technical Analysis  and Analysis Fundamental ? In general, major banks, Hegde fund, and other large financial institutions on the basis of Fundamental Analysis . And because they are the holders of most of the money in the world, so if they do trade, then the price will move according to what they do. This is in accordance with the laws of economics, for example when there are many buyers of USD, then the amount of USD in circulation in the market will be reduced, causing the price of USD rise.

What about traders that use Technical Analysis? They certainly do not have the amount of money financial institutions above (although the combined total). Plus a variety of technical indicators and hundreds of different timeframes. This causes each indicator and timeframe they will produce predictions that vary greatly.
Tips for traders that use Technical Analysis  and Analysis Fundamental For those of you that use Technical Analysis , the tips we provide are: Just use common indicators that are widely used by individual traders and trade only when there is no important economic news. For those of you who use Fundamental Analysis , the tips we provide are: patience, discipline, trade only when there are important economic news and make sure the time / hours that you use is really appropriate.

Technical Vs Fundamental Analysis 2011-01-31T17:47:00+07:00 Rating: 4.5 Diposkan Oleh: masterprofit