3 Types of Forex Market Analysis
Three 3 Types of Forex Market Analysis Do you now want to wrestle in the forex market and want to gain profit or profit as well as running a forex trading business? if your answer is yes then you need to learn a lot about how to analyze the forex market which of course this will increase the opportunity and make the decision made is right to do, namely the decision to open and close the forex trading position.
When running a forex trading business and of course we run the business in the forex market, we will recognize three types of analysis, namely fundamental analysis, technical analysis, and sentiment analysis with each type of analysis very different from one another, especially when used as a basis take the decision to run a forex trading business. And it would be very good if you as a forex trader combine the three types of analysis above but in reality it is very difficult to do so.
Fundamental Analysis is a type of analysis that studies how economic conditions affect currency movements. The factor that influences this type of analysis more is the change in bank interest rates. Other fundamental factors are gross domestic product, inflation, manufacturing data, and other economic growth data. And economic data that is very influential on currency movements is data about changes in interest rates. When the interest rate will be announced whether going up or down to the public, forex traders are ready to anticipate this announcement with Buy or Sell action.
When the interest rate rises, investors will buy more currencies and vice versa, investors will be more willing to release their currency when the interest rate falls.
Technical Analysis focuses more on how to predict currency value movements through historical data plotted into a graph with the aim of determining the right time to open and close positions in forex trading. And this type of analysis is widely used by most traders in forex trading.
By looking at the chart (candlestick) we can see how much supply volume and demand for the currency. And also we can see which currencies are trending up to be owned by many people.
While Sentiment Analysis is a type of analysis that is very popular and used by many forex traders.And to understand how to use it the following examples might help. When you see the extraordinary number of traders and investors, you will be sure that the dollar (USD) will be in a bullish condition because of the increasing volume of demand. And those who are forex traders are increasingly convinced that the dollar (USD) will be higher in value. When everyone makes forex trading transactions, we can see how many buyers of dollar (USD) buyers use the tool we call the Speculative Sentiment Index (SSI).
And because we know how many forex traders have taken Buy action or bought a dollar (USD) then we also know that those who are forex traders will also be ready to become a forex trader who will take Sell or sell dollar actions ( USD) the next one that will provide the dollar (USD) to the buyers because they really have to close the transactions of forex trading transactions by selling the dollar (USD) to make a profit.