If you’re one of the traders who’s looking for the best way to earn profit in the foreign currency exchange market, you might be asking, “What kind of forex trading analysis should I use to maximize my profit in trading?”.
If you’re one of the traders who’s asking the same question, then you’re reading the right article! Just keep on reading this article to find out which is the most appropriate for you to use.
Truth is, you should never rely on just one type of forex analysis. Each of the analyses has their own strengths and weaknesses, and each of them functions in different ways.
For example, if you’re a technical analyst, and you decided to use only one type of analysis (in your case, it’s the technical analysis), you might miss all the signals that the two other analysis might give you. Say for example, as you’re looking at the technical charts, you found out that there is a good opportunity to trade using the GBP/USD pair and make huge amount profit. Without even considering the fundamental and sentiment analysis, you decided to follow your technical charts, and you opened multiple lots at the GBP/USD pair.
Then suddenly, things turned against your odds, one of the major banks in London filed for bankruptcy. Due to the event, the sentiment of the traders towards GBP turns sour and everyone traded in the opposite direction.
And because you chose to ignore the fundamental and sentiment analysis, you are left with big losses.
That was just an exaggerated example. But it’s true. Sometimes, one kind of analysis might say that there’s great opportunity, but the other might say otherwise. So, it is important to use different types of analysis and don’t just rely on one so that you will avoid being misled and avoid losing a huge amount of money in return.