Technical Analysis and Fundamental Analysis, or both

The profession as a trader is necessary to analyze the movement or recognize the character of a particular currency so that he can trade at the right time and generate profits. It takes careful consideration in every decision making. For decision making, there are two approaches of analysis that is fundamental analysis and technical analysis.

Technical analysis focuses more on what is contained in the charts contained in trading platforms, whereas fundamental analysis is more based on the economic factors that affect price movements in the market. There are traders who only refer to technical analysis for short-term trading and some also refer only to fundamental analysis for long-term trading. However, there is also a use of the combination of both to assist in making decisions to enter the market and out of trading.

Then keep in mind also that it is not the graph that the market but the fundamental factor that causes the market turbulent and displayed in the form of graphs. As is known, that the movement of a country's currency will be affected by the condition of the country concerned, especially from the economic, social and political. Broadly speaking, there are some things that affect the currency movements of a country, namely the state economy, the level of growth, government policy, trade budgets, and interest rates. For example, in the financial markets, in general, will react to interest rates and the rate of inflation of a country. Usually when the inflation rate rises then the central bank will seek to raise interest rates to suppress the rate of consumption. With the diminishing currency circulating in the market because of a large number of people who invest money in the bank can cause the country's currency to rise.

Then which one is selected? Technical analysis or fundamental analysis?

Usually, many people prefer technical analysis because it seems more simple and instant. In addition, technical analysis focuses only on what can be seen in the graph. The main benefit of fundamental analysis is to help traders understand the global trend of one or more currencies and their links to the economic dynamics of one or more countries. Although there are fundamental changes that influence only gradually, but there are also dynamics that can create a momentary fluctuation that can affect the trader's trading position if he does not understand what is happening. The fundamental analysis emphasizes on economic cycles that affect price movements in the medium or long term. So, which one to choose? The choice of technical or fundamental analysis, or both, is returned back to the needs and preferences of each trader as technical and fundamental analyzes have their respective advantages and disadvantages. Happy trading