This article looks at the combination of forex news and chart analysis on the forex market.
There are two kinds of analysis that you can complete on the forex market and they are technical and fundamental analysis. The technical analysis will look at the movements you see on the charts and fundamental analysis will look at the forex news. There are many traders who consider the combining of these two analysis methods. When you combine the analysis methods you will be able to get a different view of the market. If you are going to do this you have to be sure that you are able to complete this correctly otherwise you will be getting the wrong information.
The Combination Amount
When you look at combining forex news and chart analysis you have to consider which analysis method is going to be your primary analysis. It is very rare that you will find a trader who is using both analysis methods as their primary. The primary method is the one that you are going to be using to determine the movements of the market.
Most traders who combine the analysis will have fundamental analysis as their primary analysis method. This is due to the fact that you can use the forex charts to determine the movement that comes after the forex news. However, it is very hard to determine the movement on the charts with the forex news.
The Forex News You Use
When you use the forex news as your primary insight into the market predictions you should consider what forex news you are going to use. There are a number of different levels of impact that you can consider and a number of news releases that you should consider. The impact level of the news that you use should relate to the timeframe that you are going to trade in. High impact news comes less often which means that it is best for long-term trading.
The Technical Analysis that You Use
When you consider the technical analysis aspect of your trading you have to consider what you will be doing. Many traders will use the forex charts to determine their entry points for the trade. However, there are other traders who will use the forex charts to determine whether the forex news impact is a viable trading option. It is best that you complete both of these steps when you look at combining the forex news and charts.
When you look at the charts for verification you will need to look at technical indicators. The indicators that you need to use will be the volume and momentum indicators. The movement on the market that you are going to look for is a trend based on the reaction to the forex news. You will first have to see if there is a movement and then you will need to use the momentum indicators to determine if the movement is strong enough to trade on.
Once you have determined this, you will be able to find the best entry point for the trade. There are a number of indicators that you can use to determine the entry point for your trades. You should use the indicator that you are most comfortable with.