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Technical vs Fundamental Analysis: Which One is Better?

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Technical vs Fundamental Analysis

Do you want to know the bitter truth?

Every choice has consequences.

Hence, it’s always better to evaluate the outcomes of a decision before we make it. And to make the best decisions, we need to examine every aspect of our choices concerning our desired results.

Similarly, when we talk about Forex trading, your every move has good or bad consequences. You need to analyze your trades to ensure that you’re making the best decisions for your trades.

Analysis can further be divided into two groups: technical and fundamental analysis. But it can be hard for you as a trader to decide your go-to analytical strategy.

Click the following link to find the best technical indicators:


Today’s article will discuss the best analytical strategy by comparing fundamental and technical analysis. We will also provide you information about Forex technical indicators so that you can identify the best trading technique for yourself. 

Let’s move forward.

Technical vs Fundamental Analysis

We need to know the best analysis strategy to get the best from Forex trading. Therefore, we will discuss both types of analysis in detail to compare fundamental and technical analysis before giving our final verdict. 

Consider the following difference between technical analysis and fundamental analysis. We will first discuss the fundamental analysis and proceed to the technical analysis.


Fundamental Analysis 

Fundamental analysis refers to prominent parts that do not require a rigorous process. The fundamental analysis depends upon multiple factors happening in daily life. This analysis can be helpful for those traders who cannot manage time to technically analyze their trades. 

The following are some factors affecting the fundamental analysis:

  • Political News 

Political News

One of the most significant driving forces of fundamental analysis is political news. Everyone keeps themselves updated with political news influencing the Forex market, from experts to newbie traders.

Political news can give you political insight into your assets. It can provide news regarding the legality of certain currencies or constitutional policies that can hinder you as a trader. 

Another factor that is considered for fundamental analysis is:

  • Market Sentiments 

Market sentiment is another valuable aspect of fundamental analysis.

Market sentiment gives you an idea about other traders’ intent towards a particular asset. It can also be used to predict the future trend of a currency. When traders feel under confident about an asset, the market trend can go down quickly because of an oversell by traders. 

You can use this as an indicator of when to enter and exit the market. 

Moving forward, on number 3, we will talk about:

  • Economic Stability 

Economic Stability

Economic stability plays a vital role in the Forex market. There are times in the market when you might feel like the whole market is under the bus because of the economic instability of the region. 

Economic stability can hint at significant moves in the Forex market. You can use this to identify more profitable assets.

Up next, on number 4, we have another factor of fundamental analysis

  • World Economic Calendars 

The world economic calendar comprises special events that can affect the Forex market. 

These events can be religious, important regional dates, and other important events that can have severe financial effects on the world’s economy. Most expert traders plan their trades according to economic calendars because the world economy tends to hit the reset button. 

The last factor of fundamental analysis on our today’s list is:

  • Supply and Demand 

Everything revolves around supply and demand rules, so you need to know the demand for your asset.

When there are more sellers than the supply of an asset, then the trends will move upward. Similarly, with a higher number of sellers, the supply of an asset will make the trend downwards. 

With fundamental analysis discussed, let’s move to technical analysis to be better positioned to assess which analysis is better for a Forex trader

Technical Analysis 

The data-driven analysis, also known as Technical analysis, refers to financial analysis that uses previous market data patterns to predict future market trends. Technical analysis provides traders with a more detailed view of trades, unlike fundamentals analysis which isn’t data-driven. 

Technical analysis takes behavioral economics out of trading decisions and only focuses on real-time buying and selling data. It includes the following aspects.

  • Automated Trading Tools

Automated Trading Tools

Technical analysis is not limited to manual analysis like fundamental analysis, which requires you to stay attentive and active for any information. 

Automated trading tools provide an easy opportunity for trading with their technical analysis. Now you don’t need to dedicate your time to any complex analysis. Instead, you can use these auto trading services for all your trades. 

These tools will automatically provide you with all the necessary information regarding an asset or currency you’re interested in.

  • Auto trading tools include
  • Forex trading robots 
  • Forex EAs

The 2nd important tool for Technical analysis is:

  • Technical Indicators 

Technical indicators help assess market trends by applying complex systems to the trading market’s present and historical data. 

Technical indicators apply to trading charts on all of the trading platforms. These indicators highlight potential trading points in trading charts. 

There are a variety of Forex indicators for everyone according to their trading style and market situations. 

Some of the famous Forex indicators are as follows. 

  • Fibonacci retracement 
  • Ichimoku cloud 
  • Bollinger band 
  • Stochastic Oscillator 
  • Moving averages 

Up next, on number 3, we have:

  • Candlestick Charts

Candlestick Charts

The primary technical analysis revolves around market trends, upwards and downwards. And without Candlestick charts, technical analysis is impossible.

Candlestick charts show you real-time data about a particular currency. You can analyze trades and their trading volume using these charts. Every currency and asset has its own trading chart for traders, which shows the price variation from the birth of an asset to the present date. 

These charts are helpful for new traders who don’t have any past experience with technical analysis to compare the opening and closing prices of different currencies. 

Finally, let’s talk about the most awaited part of this post: which analysis is better for you?

Which Analysis is Better: Fundamental or Technical?

The following conclusion can be drawn from the above comparison between fundamental and technical analysis: they are both necessary for finding the best trade. 

As a trader, you cannot ignore the importance and application of one analytical strategy for another. Both strategies are equally crucial for their purpose. 

Technical analysis can only provide you with data-driven facts while ignoring other behavioral and natural economic factors that can affect the Forex market. So as a smart trader, you should try to find an equilibrium between both trading analyses and never forget to count your intuitions in decision-making.

We hope this article will help you develop the best analytical skills in yourself. Comment below and tell us which analysis you think is more helpful for traders?

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