FUNDAMENTAL AND TECHNICAL ANALYSIS TRADING

Strength in the supply and demand depends on the exchange rate of currency - the currency. There are two striking differences in methods of estimation in which the forces of supply and demand led.The first method is known as fundamental analysis, which focuses on the material learned in school about the macro economy. By studying the financial reports and the economy and / or also political developments, fundamental analysis to interpret the changes paada main factors that cause nilail exchange rate fluctuates. If fundamental analysis can accurately identify the changes before there is movement in the market, this analysis is a good opportunity to generate a lot of money.Another analysis is technical analysis, which makes decisions based on price data in graphs.Until now, makers of technical analysis is less respected in the financial community.All the technical analysis based on three assumptions:1. MARKET ACTION DISCOUNTS EVERYTHINGAny variables that influence the price will be reflected in a graph, so the important thing is to predict where prices will move, not why prices move.2. MOVE IN PRICE TRENDPrice moves in a pattern / trend continued until one day the price was reversed (reversal), which is usually preceded by a pattern or a particular indicator.3. HISTORY Repeats ItselfThe market participants will tend to repeat behavior that is almost the same from time to time.Direct consequence of the first assumption is the maker of this technical analysis believe that there is little advantage to be gained by examining the fundamental factors of the economy. This research they say will lead to the explanation of the price - the price now, rather than an accurate estimate of the price in the future. Rather than waste time to calculate indicators such as "capacity utilization" and "housing start", the makers pay attention to technical analysis charts to identify patterns and trends. They find that commodity prices do not fluctuate randomly. By trying to identify patterns or trends that have been previously known of their development, the maker of technical analysis is estimating the movement rate is based on the history of the movement

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The makers of this technical analysis ignores the statement of politicians and government, but if the statement is important, then pernytaaan reflect existing exchange rate. If Alan Greenspan, head of the Federal Reserve, said that the U.S. Federal Reserve will cut interest rates in the near term, the fundamental analysts will soon buy swissfranc, euro, and / or yen in its exchange rate with USD. This is because the value of U.S. interest rates low and make less attractive to invest USD when compared with other currencies.Makers pay attention to technical analysis graph while Greenspan speaks, he will notice a decrease of USD on the charts. As exchange rates vary yanng started to become a new trend, making technical analysis to be changing its position in the market. The makers of technical analysis will follow the trend: they are not going to start a movement in the market but go with the flow of sales that occurred at that time. If someone should listen to Greenspan's speech, then he can not follow the events that occurred in Germany and Latin America, thus making an indirect technical analysis will complement the perspectives of all activities that occur on a maker of fundamental analysis.Someone did not take many years to learn to use both these systems in the transaction. Read and plenty of practice is the key.

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