Fundamental and Technical Forex Australia Trading

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Forex Australia Market

This article looks at the differences between technical and fundamental forex Australia trading.

There are a lot of new traders who winder about the use of fundamental and technical trading.  These traders are confused as to which of these trading methods they should be using. It is important that you know which type of trading to use because this will affect all aspects of your trading from the strategy that you use to the trading tools you have.  There are a number of points that you need to consider when you look at the differences between the two forex Australia trading methods.

What You Look at on the Forex Australia Market

The first difference that you will find between forex Australia technical and fundamental trading is what you are going to be looking at.  With technical trading you are going to analyse the forex charts and determine how to trade based on this.  With fundamental trading you are going to be looking at the forex news and other fundamental reports that impact the market.

The actual analysis that you are going to complete on what you look at will also be different.  Technical traders employ technical indicators and other tools to determine what the chart movement is doing and when they are able to trade.  With fundamental analysis you are going to look at the upcoming news and how this can affect the market.  You will also have to consider market sentiment and the impact that this will have on the market reaction.

The Time Horizon

The time horizon that you are dealing with will vary.  While it is possible to use technical and fundamental trading in any timeframe there are certain timeframes that work better.  This means that when you use fundamental analysis you may find it easier when you trade in the long-term.  However, when you use technical analysis you might find it easier for the short-term.

There are many strategies that allow you to trade with any analysis in any timeframe.  However, you have to consider the number of trade opportunities you will get and the ease of trading.  The harder it is to find a trading opportunity the more likely you are to divert from your trading plan.

The Combination of the Trading

There are many traders who feel that you will get the best idea of the forex market if you combine the analysis methods.  This is often much easier said than done because of the implications that come from the combination.  When you combine the analysis you are going to have to find complementary information and determine how the fundamental analysis will work with the technical analysis.

The most common way that this is completed is through the use of technical analysis to confirm the movements of fundamentals.  This can be done with the use of price patterns and technical indicators.  The tools that you use will be decided by the strategy that you are going to use and the indicators that you are comfortable with.  If you are not comfortable with this trading then you should not use it.

 

 

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