Technical Analysis

Technical analysis is the study of historical price movement to determine patterns and probabilities of future movements in the market through the use of technical studies, indicators, and other analysis tools.

Technical analysis of a market can help you determine not only when and where to enter a market but more importantly, when and where to exit.

Technical analysis is based on the theory that markets are chaotic (no one knows for sure what will happen next) but at the same time, price movements are not completely random. In other words, the mathematical Chaos Theory proves that there are identifiable patterns that tend to repeat in a situation of chaos.

Most traders will agree that there is no certainty in predicting exact price movements. After all, successful trading isn’t about being right or wrong: it’s all about identifying odds and trading when odds are in your favor. Part of determining probabilities includes predicting the market direction and when / where to enter a position, but equally important is determining your
risk-reward ratio.

Fundamental Analysis

Fundamental Analysis is a broad term that describes trade action based entirely on global aspects affecting the supply and demand of currencies, commodities and stocks. Many traders use both basic and technical methods to determine when and where trades will take place but they will prefer one over the other for the final decision. However, if you only want to use
fundamental analysis, there are several resources you can base your ideas on:

Central Banks
Economic Releases
Geopolitical Tensions
Weather Conditions
Seasonality

en_USEnglish