Methods of analysis at FOREX :

Methods of analysis at FOREX :

As you understand, the secret lies in the ability to determine future market movements and intelligently manage its portfolio. To anticipate the market there are two main branches of forex analysis: graphical analysis and fundamental analysis.
These two types of analysis make it possible to understand the mechanisms and factors involved in the future movements of currency pairs.

We will quickly go over the principles of the two branches of analysis. More comprehensive courses for their subjects are available in the "Intermediate Courses" section (Basic Analysis and Technical Analysis).


What is graphical analysis?
Graphical analysis (also called analytical or technical) is the study of Forex charts. These studies are generally carried out using different forex indicators.

The idea is quite similar to the meteorological study (even if the comparison is vulgarized). A meteorologist, to make weather forecasts, will consult various indicators like temperature, humidity, pressure, wind ... etc. By comparing this information and making the analogy with what it already knows, the meteorologist will then be able to decide on future forecasts with more or less certainty.

The trader who carries out graphical analysis, will study the graphs of different parities, using indicators such as oscillators, moving averages, volume indices, horizontal or oblique lines ... etc. By cross-checking this information, with experience, the trader will then be able to highlight particular contexts or the course will have more probability of going up or down. And this, estimating how much.

As you have understood, it is an estimate with more or less certainty. (The meteorologist, too, is regularly mistaken!). The goal is not to be right every time (which is totally impossible, if someone tells you the opposite, beware!), The goal is to be right more than one Times out of two. Or the month have a greater profit than losses.

Some graphical analyzes are generated directly by computer. Software, developed by traders, intersects the information of the chosen indicators and then provide indications of purchase or sale. These programs are commonly called expert advisor or trading system.

This is the principle of the expert advisor mobile averages of Forexagone available in the forecasts section.

What is fundamental analysis?
Fundamental analysis is based on the economic climate. There are two basic types of analysis. The first is to take long positions (up to several months) based on the deep economic climate giving the tendency to a currency. This analysis proves to be very complicated because it requires increased knowledge and the possibility of acquiring knowledge of critical information inaccessible to individual traders. The second branch of fundamental analysis consists in tradering many small economic news.

Indeed, several times a day, the results of economic announcements are revealed at specific times. Their result, when diverging with the result that was commonly expected, then causes more or less strong bullish or bearish accelerations, depending on the figure revealed.

Examples include employment rate, unemployment, trade balance, consumption indices, interest rate ratios, or speeches by leaders on the future monetary policy of a state .

All of these advertisements bear witness to the economic climate of a currency (or country) and can therefore trigger a strong impact on the market. It is on this principle that the fundamental analysis tool of forexagone is based by delivering the many information necessary to decipher the impact caused by each of these economic events.
0