It is often said fundamental analysis tells you what to trade, and technical analysis tell you when to trade it. Learn about fundamental, and technical analysis to spot trading opportunities in the CFD and forex markets.
USING TWO COMPLEMENTARY TYPES OF ANALYSIS
Experienced traders use fundamental and technical analysis to gather valuable market information. Learn the types of economic indicators to look for, and how to apply technical indicators to manage your trading strategy and minimize your risk exposure.
UNDERSTANDING FUNDAMENTAL ANALYSIS
Fundamental analysis attempts to analyze price information under the economic forces by assessing the “fair value” of a currency or security in prevailing market conditions. Differences between the assessed “fair value” and the market value are said to drive price movements, with prices expected to rise if the fair value is higher than the market value, and vice-versa.
Technical analysis is a method of using market data, primarily past prices, and volumes to estimate future prices.
Technical traders use a variety of tools to identify trends and trend changes, thereby forecasting prices. These tools are based on mathematical concepts that are graphically represented for ease of analysis.
A trading strategy can offer benefits such as consistency of positive outcomes, and error minimization. An optimal trading strategy reflects the trader’s objective and personal approach.
Fundamental traders watch interest rates, employment reports, and other economic indicators trying to forecast market trends.
Technical analysts track historical prices, and traded volumes in an attempt to identify market trends. They rely on graphs and charts to plot this information and identify repeating patterns as a means to signal future buy and sell opportunities.
Leveraged trading involves high risk since losses can exceed the original investment. A capital management plan is vital to the success and survival of traders with all levels of experience.
Learn risk management concepts to preserve your capital and minimize your risk exposure. Seek to understand how leveraged trading can generate larger profits or larger losses and how multiple open trades can increase your risk of an automatic margin closeout.
Execution speed and numbers are based on the median round trip latency from receipt to response for all Market Order and Trade Close requests executed between January 1st and May 1st 2019 on the OANDA execution platform.
Contracts for Difference (CFDs) or Precious Metals are NOT available to residents of the United States.
MT4 hedging capabilities are NOT available to residents of the United States.
The Commodity Futures Trading Commission (CFTC) limits leverage available to retail forex traders in the United States to 50:1 on major currency pairs and 20:1 for all others. OANDA Asia Pacific offers maximum leverage of 50:1 on FX products and limits to leverage offered on CFDs apply. Maximum leverage for OANDA Canada clients is determined by IIROC and is subject to change. For more information refer to our regulatory and financial compliance section.
Your capital is at risk. Losses can exceed investment. Leverage trading is high risk and not for everyone.