In financial markets, where the competition between the traders is very high, investors are forced to turn to the technical analysis. Technical analysis of the financial market is based on such techniques as a construction of candle charts, trend lines and others.
Leading world experts of the technical analysis note that for the last few years the interest in technical analysis increased due to the presence of big investors in Asian markets such as Singapore, Japan and China. These markets are too complex and therefore fundamental analysis doesn’t supply investors with enough information for their trading decisions. The results of the traditional fundamental analysis and technical charting on Asian markets are very different.
Thus more and more investors are concentrating on the technical analysis of the financial markets rather than the fundamental one. But fundamental analysis also has found its place. Now it is mostly applied to analyze marginal revenue, industry trends, etc. Technical analysis gives the traders more detailed information about the market’s direction and involves the use of levels and patters in the graphs. Traders who use the technical analysis know how to interpret the market psychology by using its visual display on the charts.
As the world economy experiences many changes it becomes very difficult to predict the movement of the financial markets. That’s why the expert of markets’ analysis try to combine technical and fundamental analysis and decrease the differences between them.
There is nothing new in a wish to predict the future prices on Forex market. Even one hundred years ago traders used the technical analysis for the Asian markets trying to predict the prices for rice. Today we have a lot of different techniques and strategies for the technical analysis: Fibonacci levels, Elliot Waves, etc. Thought there is no single strategy that can guarantee you high level of probability. That’s why the opinions of the traders are very different as well. Some of them believe in technical analysis, some of them focus only on the fundamental analysis, some do both.
When you are looking for ideal method of market’s analysis, we recommend you to try different ways of trading systems and market analysis. Don’t forget that market’s direction considers all factors and your trading strategy will only improve if you use different ways of its analysis.