Basics Of Technical And Fundamental Analysis

In trading, of course we know some techniques of analyzing in trading, namely Fundamental Analysis and Technical Analysis.

Fundamental Analysis is an analysis that uses news to be released (news NFP, Oil inventory, Retail Sales, etc.) as an indicator to read where prices will move.

Technical Analysis is an analysis that uses patterns that have been formed by the previous candle, based on the time, the shape of the candle, and various other technical factors to read in which direction the price will move.

Some people think technical analysis is the best for trading, and some people also consider Fundamental analysis is the best for trading.

In my opinion, there is nothing wrong with this disagreement, because if we focus on one of the analysis, able to provide good and consistent profit because the forex market is a market that can always provide opportunities to the different perspectives of each trader.

Okay, in this article, I want to try to share about both types of analysis in a unified frontier, where I will share how to use Fundamental Analysis (effects of news releases) into Technical Analysis.

So, the idea of ​​a combination of these analyzes is, The main analysis using Technical analysis, and reinforced (supported) by Fundamental Analysis.

Well, to begin with, please refer to the USDCAD Chart image below

The picture above is a candle depiction in the period June 19, 2017 - July 14, 2017.

Where in the long run, this USDCAD pair in technical analysis is still in a strong Downtrend flow.

In the black box, the price has decreased quite strongly, it is the time of the NFP news release on Friday 7 July 2017.

And on the green box, the candle again declined quite strongly, it was when the Bank of Canada (BoC) took the Interest Rate decision on their country currency, Canada Dollar (CAD).

In this merging idea, the idea that is believed to be, fundamentals is always moving the price towards the long term, which we can read Fundamentally.

In the case of USDCAD above, in the long run and technical analysis, the price is in a strong downtrend flow, so the fundamentals will reinforce the decline that will occur and not form a reversal pattern or reversal trend, and sometimes the price will move a little tricky by trying to move Against the trend then the next price will re-enter its main trend.

The application of this combined technique to a pair of pairs with a position against the USD (such as USDCAD, USDJPY, EURUSD, GBPUSD, AUDUSD, etc.) is very effective.

Where in the example above, the USD news release gives the effect of price direction according to big trend, and the news release of CAD also gives effect price direction according to big trend.

In the application of Cross Pair, must see into the news in every pairs, for example crosspair is GBPJPY below.

In this GBPJPY pair, the strong trend is Uptrend (See 4 Hours frame time), and in Time Frame 1 Hour, seen in the black box, the candle had a strong decline, then continued the stronger gains back.

The decline, caused by the release of American Retail Sales news, Yen has decreased its movement is stronger than Poundsterling. However, prices rebounded again as GBPUSD rebounded continuously, while the USDJPY pair started to experience a weakening movement.

In this case, the cross pair has the possibility of a tricky move from the USDXXX or XXXUSD pairs.

This is evident from the price response to the yen's movement, which is then responded by Pounds so that the decline is just a deceptive movement, where for a few days earlier, the price of GBPJPY tends to follow the current movement of the Yen.

Implementation on Crosspair makes us have to monitor which pair has strong pressure in the currency pair on Cross Pair.


Hopefully this article useful, add your information about the forex market, and help you in developing your trading techniques.

See you later. Happy Trading.


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