The superiority of fundamental or technical analysis

  • 2023/2/26 10:55:46
  • read: 5
  • forextradingsessiontimes

Prior to the mid-1980s, the foreign exchange market was dominated by fundamental traders However, with the increasing popularity of forextradingmarket forex trading session times forextradingtime the emergence of new technologies, the influence of technical trading in the foreign exchange market has greatly increased High financial leverage has led to the emergence of more and more momentumfunds or modelfunds ( modelfunds) have emerged as important players in the foreign exchange market with the ability to influence the cashback forex of currencies Technical analysis concentrates on price fluctuations Technical traders use historical data to predict future price movements Technical analysis assumes that the price of a currency already reflects all current market information; therefore, studying the behavior of prices is sufficient to make good trading decisions In addition, Technical analysis also assumes that history usually repeats itself over and over again. Technical analysis is a popular tool for short- and medium-term traders because short-term exchange rate movements are driven primarily by peoples emotions or market perceptions, so technical analysis is particularly effective in the Forex market. The concept that markets tend to develop into trends and the ability to identify trends at an early stage of development is the key to technical analysis Technical analysis combines price behavior and momentum by showing past price behavior on charts to predict the future performance of a currency Technical analysis tools, such as Fibonacci retracements, moving averages, Oscillators, candlesticks and Bollinger Bands, can provide further information and reflect the future performance of a currency. can provide further information that reflects the extreme sentiments of buyers and sellers, allowing traders to understand at which price levels the markets greed and fear forces are strongest. Basically, markets are divided into two types, trends and ranges; later, we will try to identify some rules that will help traders determine which type of market they are trading under and what kind of trading opportunities they should look for Which is better, technical analysis or fundamental analysis? Which is better, technical analysis or fundamental analysis, is a long-standing debate and after many years, it is still hard to decide. Since technical analysis does not require a long period of research, most traders stick to it. Once technical analysis is mastered, it can be applied fairly easily to any time frame, or any currency traded. However, when considering both strategies, it is important to know that fundamentals can trigger technical swings, such as breakouts and trend reversals, while technical analysis can explain swings that cannot be explained by fundamental analysis, especially Volatility in calm markets, for example, resistance in a trend As you can see in the chart below, before September 11, 2001, USD/JPY had just broken out of a triangle pattern to the upside and looked set to continue rising However, as the chart shows, the price did not break out of the highs to the upside as expected by technical analysts After the terrorist attacks, USD/JPY turned around and fell from the highs of September 10 121.88 to a low of 115.81