Fundamental analysis and technical analysis are two broad types of
techniques used in the forex market. But which one of them is more
efficient？To get more news about
WikiFX, you can visit wikifx official website.
Technical analysis seeks to predict price movements by examining
historical data, mainly price and volume. Popular technical indicators
include the moving average (MA) and the moving average convergence
divergence (MACD).
Fundamental analysis focuses on factors that might influence
currency values, including unanticipated events, monetary and fiscal
policies, etc.
Fundamental analysis could bring about reliable forecasts on the
long-term exchange rates ahead of time. However, it cannot tell exactly
where are the starting point, the determining reversal, and the turning
point of the fluctuating exchange rate. Therefore, analysts should use
fundamental analysis in conjunction with technical aspects as well as
market psychology.
Some followers of the technical analysis may struggle in herding
behavior. Once observing other bullish investors, they gravitate toward
the same or similar investments without their own analysis.
To conclude, there is no technique that could fit all conditions
in the market. Besides combining the two methods, investors should
create their own trading strategy and trade on the basis of both theory
and actual situation.
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