Are you new to the world of forex trading, and wondering if you can combine both technical and fundamental analysis when trading?
Yes, it is possible and often recommended to use both technical and fundamental analysis when trading in the forex market. Technical analysis involves the use of charts and technical indicators to analyze past price movements, identify trends, and predict future price movements.
Fundamental analysis, on the other hand, involves the examination of economic and financial data, news events, and other factors that may affect a currency's value.
See also: Is Technical Analysis Enough For Trading?
Combining both technical and fundamental analysis can provide you with a more comprehensive view of the market, which can help you make better trading decisions. For example, while technical analysis can help in identifying trends and entry/exit points,
It cannot account for unexpected events that may impact the market. Fundamental analysis, on the other hand, can help you in identifying potential market-moving events such as economic data releases, political events, or changes in central bank policies.
By combining both forms of analysis, you get a better understanding of the market and make more informed decisions about when to enter or exit trades. For instance, as a technical trader, you may use charts to identify a potential trade setup and then check for upcoming economic events to ensure that no news releases could impact your trade negatively.
It's important to note, however, that using both technical and fundamental analysis requires a strong understanding of both forms of analysis. Be eager to develop skills and knowledge in both areas to be able to properly interpret and make use of the data and information available.
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