Fx School

Methods of doing the market analysis

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Best analysis to follow

You have learned what are the three different types of analysis in the Forex market. You are wondering what type of analysis is best for your trade. The best analysis does not depend on what type of trader are you. If you are a serious trader and want to make money desperately, like everyone else (because nobody has got the time to play in the forex market) you have to follow and understand all three types of market analysis and put it into action when you are making a trade.

These might seem confusing to you. How can all three analysis come in handy when I am placing a trade. Can you start your car when it has one hole in one tire? You can start your car, it will go forward for some time, then it will stop. If you more try it, your tire will come out of your car wheel.

Overview of market analysis 

The example is perfect for your forex trade analysis. It is not a clever trading way to follow only one analysis. You may think the market is large, but I will trade on only one currency pair but make sure you do the market analysis perfectly. The markets are interrelated around the world and you need to know the market of the world to know when your pair currency will move in your expected way.

Let’s look at an example to understand why following a single analysis is not good in the forex market. Suppose, you are a trader who lives in the United States. You are looking at your chart and suddenly your desired currency showed you a large movement in the price level. You become excited which is very natural. You placed a big trade on the currency movement. The next thing you know, the market moves in the opposite direction. All your money is now gone with the market and you are at the risk of losing your capital investment.

This is only one small example of why you should not follow a single analysis. You always check the air pressure of your car before you went to driving. This is also the same for you in forex. You have to analysis the market from every angle before you make a trade on the Forex market. If you think, one analysis will give you the best result, you are wrong. If you do not believe us, place a trade on the market, you will see that you are losing money. Forex market is much bigger than the stock market, which also means, there are more movements in the market. Also, it is composed of two currency from two different countries. It is best to analyze market from three points of analysis of forex, that is the technical, the fundamental and the sentimental one.

Conclusion

Do not stick to one analysis of forex. This market is very large and provides many signals based on different conditions. Use your knowledge of the understanding of the three analysis of the forex market analysis and make your trade to make money.