1. Fundamental Analysis– is very similar to equity analysis in that traders attempt to determine the true value of a company, except they are evaluating an entire country, or two. They are attempting to gauge a country's economic strength, as reflected in the price of its currency, in comparison to other countries.i,e,.Interest Rates,
1. Fundamental Analysis– is very similar to equity analysis in that traders attempt to determine the true value of a company, except they are evaluating an entire country, or two. They are attempting to gauge a country's economic strength, as reflected in the price of its currency, in comparison to other countries.i,e,.Interest Rates,
Non-Farm Payroll and Commodity Prices.
This is frequently referred to as a currency's strength or weakness. A currency that is strong has a relatively high value, whereas a currency that is weak has a relatively low value. For example, the AUD/USD pair features a weaker Australian dollar that buys approximately $0.71 of the stronger US Dollar, whereas the GBP/USD pair features a stronger Great British Pound that buys approximately $1.54 of the weaker US Dollar.
2. Intermarket Analysis – is a technique for analyzing markets that involves the examination of correlations between various asset classes. In other words, what occurs in one market has the potential to affect other markets, and most likely does, so a study of the relationship (s) may prove beneficial to the trader.
3. Technical Analysis – is a trading discipline that utilizes statistical trends derived from trading activity, such as price movement and volume, to evaluate investments and identify trading opportunities. actually it is an indicator based on price action, financial analysis that uses patterns in market data to identify trends and make predictions.
4. Sentiment Analysis- is the process of determining traders' net long or net short positions in order to influence your own currency trading decisions. While sentiment analysis is directly applicable to forex, it is also used in other asset classes such as stocks and bonds.
