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Chapter 6, Part V. What type of analysis is better? Page 2

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 15, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Fundamental analysis

    It’s unwise to negate the fact that eventually currency rates move due county economic health per se relative to other economies. So, if one economy is healthy and has even stronger perspective and potential, then its currency gains, if not – its currency loses. That is what fundamental analysis stands for. It helps us to make a conclusion about if an economy is healthy at all or not, what perspective does it have, does it grow, flat or recess, is it stronger than another economy, say, EU or not, etc. As a result of the application of fundamental analysis, each trader forms his/her own fundamental outlook as on the current situation as on the future. Let’s go further…

    Sentimental analysis

    We come to the conclusion that each trader has own fundamental outlook on some country’s economy, say, the US of A. But what does it mean? It means is that each trader has a view how bearish or bullish he/she is on particular economy. The total of these opinions creates a market sentiment. So, fundamental analysis creates shape of assessment by market participants of a US economy, i.e. – total market view (i.e. sentiment) on economy and bullish or bearish sentiment itself.

    Technical analysis

    As technical analysis is dealing with charts – it allows us to see this current market sentiment both in real-time and as historical and to analyze it with technical tools.

    Pipruit: Cool…​

    Commander in Pips: Yes, in fact, you have all that you need – historical prices, all the necessary figures and data. All you need now is to just study how to apply in-depth analysis as best as you can do and make good trades.


    Pipruit: …but could you give me just a common example, how this 3-D way could be applied in real life?​

    Commander in Pips: Sure. One example you’ve already got – in the first part of current chapter “Different types of market analysis” you’ve seen what a financial catastrophe will be upon you, if you will rely on just technical analysis and totally ignore fundamental and sentiment.
     
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