For today there are two kinds of the analysis of the financial markets: fundamental and technical. The choice of a method of the analysis is not an easy problem, and completely depends on priorities of the trader.

Let’s consider some of kinds of the analysis more in detail.

What do you know about the fundamental analysis?
The fundamental analysis represents the analysis of economic and political conditions of countries, which currencies bargain in the Forex market. A problem of the fundamental analysis is the estimation of possible influence of those or other events on movement of exchange rates.

The fundamental analysis includes the analysis of economic indicators.
They are published regularly and give the chance to investigate tendencies in economy of the various countries. Results of such researches allow to explain current movement of rates of exchange and to predict the future movements. For example, when in the USA there is a constant growth of the consumer and industrial prices, which are accompanied by employment growth in the market, we can start to say about threat of inflation and, as consequence, the possible raising of interest rates that, in turn, can lead to a dollar rise in price. In other case if the economy is slowed down also Central Bank tries to stimulate economic growth interest rates can be lowered that, as a rule, negatively influences a rate of national currency. Anyhow, but fundamental factors frequently underlie global and local trends in Forex market.

And now let me give you some information about the technical analysis.
At the basis of the technical analysis is the analysis of schedules. It is said that the schedule is an embodiment of influence of fundamental factors on the market.
At analysis carrying out following postulates are taken into consideration:

1. In the schedule all information on the market is concentrated;
2. The market has memory and, hence, recognizing what was in the past, it is possible to predict the future.

On the basis of these postulates is developed the wide spectrum of indicators of the technical analysis which problem is to help at “prediction” of the future movement of exchange rates.

There are advantages of the technical analysis.
1. The fundamental macroeconomic analysis is very combined. In most cases it is impossible to consider all factors influencing the market. The technical analysis is much easier, as it investigates only one object - the schedule of change of the price.
2. At the technical analysis a great number of supporters, who are active participants of the market. They use the same schedules, receiving thus similar results and doing identical conclusions. This mass coordination, in turn, influences movement of the prices, forming it in a favourable direction. Thus there is a forecast self-execution.
3. The technical analysis is universal - it can be applied in the various financial markets practically without changes.

It is a must to gather as much knowledge about Forex market as possible. Because this knowledge will help you not to lose much money on Forex trading or Forex investment.

Surely not a single piece of knowledge can be rock solid guarantee against losses, in particular on Forex market, but sometimes even one Forex book can be of big service to you.

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