The number of people who have been entering trading in the forex market is enormous. Online forex trading has become very popular, and the strategies that are used by fundamental traders and technical traders are very different.
Essentially all the traders can be divided into three categories. These are fundamental traders, technical traders, and those who use the strategies of these two categories.
The fundamental traders are those who take the help of micro-and macroeconomics to predict the trend of the trade. They analyse the economic conditions of the country where the currency is issued and also other factors which can affect the value of the currency. These people follow the news carefully, as there are many factors which can cause fluctuations in the currency’s value.
Political cause or even a natural disaster can affect the currency value. They have to have a deep understanding of the global economy, and they have to know what changes and reactions it needs. They can use this knowledge for both long and short trades. This knowledge is challenging to get, so this is not suitable for everyone.
For the people who cannot analyse the global economic condition, the best is the technical situation. This is very popular among the traders and is a strategy that is used by many people in the forex market.
The technical analysis is comparatively easier to understand than the fundamental analysis, and this is the reason many traders in the market use it. There are many forex courses which concentrate on teaching technical analysis.
Using this analysis, one can learn to predict the movements of the market. Traders using this analysis assume that history always repeats itself. They also assume that the price always reflects the demand, supply and also the economic conditions of the currency and the nation. This involves studying market trends.
There are some traders in the forex market which use both technical and fundamental analysis. They use both the analysis, but most of them concentrate more on the technical analysis.
When a trader enters the market, he over some time for sure will decide which analysis is he good at it and what benefits him. The decision and the comfort level depends on different factors like the ability to take risk and personality and also what they like naturally.