The number of people who have been entering the trading in the forex market is huge. Online forex trading has become very popular and the strategies that are used by fundamental traders and technical traders are very different. Essentially all the traders can be divided in three categories. These are fundamental traders, technical traders and those who use the strategies of these two categories.
The fundamental traders are those which take the help of micro and macro economics to predict the trend of the trade. They analyze the economic conditions of the country where the currency is issued and also other factors which can affect the value of the currency. These people follow the news carefully as there are many factors which can cause fluctuations in the value of the currency.
Political cause or even a natural disaster can affect the currency value. They have to have a deep understanding of the global economy and they have to know what changes and reactions are needed. This knowledge can be used for both long and short trades. This knowledge is very difficult to get so this is not suitable for everyone.
For the people who cannot analyse the global economic condition the best is technical situation. This is very popular among the traders and is a strategy that is used by many people in the forex market. The technical analysis is comparatively easier to understand than the fundamental analysis and this is the reason why it is used by many traders in the market. There are many forex courses which concentrate on teaching the technical analysis.
Using this analysis one can learn to predict the movements of the market in the future. Traders using this analysis assume that history always repeats itself. They also assume that the price always reflects the demand, supply and also the economic conditions of the currency and the nation. This involves studying the market trends.
There are some traders in the forex market which use both technical and fundamental analysis. They use both the analysis but most of them concentrate more on the technical analysis. When a trader enters the market he over a period of time for sure will be able to decide that which analysis is he good at it and what works in his favor. The decision and the comfort level depends on different factors like ability to take risk and personality and also what they like naturally.