Forex: Fundamental or technical?

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Which direction of forex market research is the most effective? Supporters of technical analysis have adopted the principle " price takes everything into account ", which they oppose any criticism. Why study the impact of fundamental factors on the exchange rate if they are already included in Forex pair quotes? Why try to understand the worldview of central banks if the market already knows what they think? If everything were so simple, any technical analyst would easily earn millions of dollars. In fact, information by different people is interpreted differently. Furthermore, who guarantees that what is included in the currency exchange rate is true data? For example, the market is now certain to cut the federal funds rate in July, but will the Fed really weaken monetary policy? No, I am not asking you to abandon the use of technical analysis in practice.

No way! This direction of market research is extremely Mexico Mobile Number List important in making final decisions on the conclusion of the transaction, in defining targets and stop orders, in building a competent risk management system. However, in my opinion, only a reasonable combination of fundamentals and technology is the right path to success. Macroeconomics will help us understand the background in which markets function. A typical example is the current situation in Forex. The growth of the euro against the US dollar, from a fundamental point of view, is due to the Fed's greater ability to weaken monetary policy than the ECB. The federal funds rate is 2.5%, the European Central Bank deposit rate is negative (-0.4%). In such conditions, it makes sense for the trader to look for bullish patterns on the EUR/USD charts.



As I noted in my blog, one of the most effective models is the “ Expansion Wedge ”. It represents a combination of rising highs (points 1,3,5) and falling lows (points 2,4). In the market there is a serious struggle between "bulls" and "bears", and the ordinary trader must use coyote tactics: see who wins and will come in his direction. Expanding wedge on the EUR/USD chart LiteFinance: What to choose?  technical or fundamental analysis |  Litefinance According to the theory, the pullback after point 5 is accompanied by a decrease in trading volumes. This shows the weakness of the "bears". The trader needs to strengthen vigilance: it is the correction to the levels of,  and of wave 4-5 followed by a pullback of support serving as the basis for the opening of a long position.