Home » Business » Forex Market is based on Fundamental and Technical Analysis

Forex is basically is based on the credit and financial markets. The Basic and Important Participants in Foreign Market is based on the financial participants and the main participants of this are the larger International banks and financial centers of the world which deal the market as per financial rules. The main role they play is trading in a wide range of multiple buying and selling in different currencies and also different types of buyers and sellers are available anytime just the exception of weekends. This market is 21/5 market mostly.

How This Market Runs?

This market is all about the selling and buying on a single click and this is basically work like one currency trades against the other currency e.g. the pair of EUR/USD, GBP/USD, USD/JPY etc. these all are the currencies of different countries and trades opposite to each other. EUR is stands for Euro and USD is Unites State Dollar.

This Market is based on Fundamental and Technical Analysis:

This market all and all based on the technical and fundamental analysis which is call the technical study and fundamentals of the concerning state which currency is pricing. As per these studies people do bids and place their positions in the market. The result is both side either profits or losses.


Difference between Fundamental and Technical Analysis:

It is very difficult to decide whether fundamentals are important or the technicals for the trader and which are better. So this question will answerable after getting the difference between fundamental analysis and technical analysis. Because there are two types of traders one who likes to trade on fundamentals and other who love to trade after getting technical things.

  1. Fundamental Analysis:

Fundamental analysis involves the assessment of the economic well being of the concerning entity. They see the movement of the prices and value of the company and the growth of economy. This is also based on the unemployment rate and GDPs of the states. Political news and even war scenarios are also affected on the price of the currency. Currency of any state is based on the economic stability.

  1. Technical Analysis:

Technical analysis is based on the pattern recognition on the price chart. For equity traders it also depends on the volume of the shares trading on the exchange. Because the price will move upside if the demand of the currency or shares increased. These charts’ patterns are triangles, flags, double bottom, double tops, hanging man and many more.

Bottom Lines:

So at the end of all discussion it can be said that there are common types of analysis used in the market and most of the traders follow both when they are going to take trading decision regarding currencies. They focus on the limits when they should enter and on which point have to exit for a good trade. So this is all about forex and financial market.

Skip to toolbar