Importance of Forex analysis
We are very close to making money in Forex. All of these articles that you have read are not in vain. We have discussed earlier, there are three types of analysis. The fundamental, the technical and the sentiment analysis. Before we give a lecture on each of this analysis, you have to know the importance of Forex market analysis.
Remember, from beginner to pro, from zero level experience to highly experienced, all people do Forex analysis. The people who can do the analysis with the best match of their prediction, they make money put of the trade. But it does not mean that, after years and years of trading in forex market, they have gained a gut feeling. They do not trust that gut feeling and that is why they do an analysis of the market. If they tell you to trust your inner voice, you are wrong. Because nobody wants you to make money in the forex. If want to make money, they have to make less money.
Understanding the market movement
One of the most basic ideas why people analysis the forex market is that they want to understand the movement of the market. Forex market is much larger than the stock market and they want to know, why they have lost money on the trade after they have used the same trade a few second ago. With this forex market analysis, you can tell the actual movement of the market.
Don’t listen to your inner voice
Another reason you should do forex market analysis before investing your real money is, to ignore your inner voice. You might think, which is very natural to man, that the market will move up. You place a trade and without your understanding, the movement of the market goes down. To avoid these types of miscalculations, forex market analysis is necessary. You may think that traders who have been in the FX market do not do an analysis. They can simply tell the market movement by looking at the live signal of the market.
But if you look closely, there is a notebook on their lap. They do not have come to this position because of their gut feeling or what they thought to be right. They have always analyzed the forex market and by doing this, they have gained solid experience on the market move. That is why they are successful professional traders and you are a newbie.
Never think that only one type of analysis is necessary to make money in the FX market. The opposite is true. You need to have a thorough knowledge of all the other analysis of the market. Forex analysis is like a car. Technical, fundamental, sentimental all these analyses are part of your car. If your car has punctured wheel, it cannot run. If your car has a bad engine, it will go for sometimes and then stop. If you want to make money smoothly and in a gradual process, you have to analysis the FX market.