Deciding on an analysis method while trading in JustMarkets has a major influence on the profitability of your trade. Two primary approaches dominate the trading world: Contrary to common belief, stock analysis can be divided into two categories namely: fundamental and technical analysis. Both give different perspectives on movements in the market and potential trends, but is the one which is effective for traders at JustMarkets? Each of the methods is expounded on this article and comparisons are made to determine which of the two is preferable when it comes to trading on the platform.
Understanding Fundamental Analysis
The basics of fundamental analysis are based on the assessment of its market value relative to the available economic, financial, and other pertinent factors about the respective industry. In summary and relevance to Forex traders, it implies the matching of different economic factors such as interest rates, inflation, employment data, and other geopolitical activity that affects the value of the currency. It also uses central bank policies, fiscal policies, as well as the overall health of a given economy in analyzing whether a given currency is likely to appreciate or depreciate over time. For further guidance, JustMarkets Support offers resources to help traders understand and utilize fundamental analysis effectively.
In JustMarkets, fundamental analysis is most beneficial to long-term traders and those who engage in slow-moving trends and price movements. As mentioned above, traders must have proper knowledge of the economic forecast and the macroeconomic factors that show the likelihood of a drastic change in the value of any currency. For example, if the Fed Chairman speaks in terms of raising interest rates then the traders can look forward to a possible appreciation in USD. It helps the trade to make correct decisions regarding the bigger trends within the market and not have to worry about small fluctuations.
Understanding Technical Analysis
Technical analysis entails involving the traders in analyzing price charts and employing technical variables with a view to explaining future prices., fundamental analysis involves comparing the current values endured by an asset to the associated economic and financial factors knowing trends, chart patterns, moving averages, relative strength index, and Moving average convergence divergence in technical analysis.
In JustMarkets technical analysis is widely used by short-term intraday traders and those who like multiple trades per day. Short-term traders and scalpers who desire specific entry and exit points to make trade also benefit from technical analysis. One advantage of technical analysis is that it provides decision-making without reference to current economic data because it only looks at the recent past. Through understanding the support and resistance levels it will be easier for a trader to determine the right time to either buy or sell an asset.
Which Analysis Works Best on JustMarkets?
As to whether fundamental or technical analysis is the best for JustMarkets issues, you’re better off merely asking which way suits your trading profile and needs.
Indeed it is often the case for long-term investors and trend traders that fundamental analysis is more useful. JustMarkets includes economic calendars, news feeds, and a list of tools that may be useful to keep you updated on events that affect the market. It is one aspect that can assist the traders in their entries and exits in the marketplace based on keeping an eye on the long-term effects of forex fundamental indicators on currencies and relating all the existing indicators to the overall effects that they have on the value of money.
On the other hand, technical analysis possibly, would prove more suitable for the trader who makes frequent and/or short trades. For instance, JustMarkets provides a variety of technical analysis options – charts and indicators – for traders to analyze the price move easily. In the long term, the trends may not be very pronounced, but traders armed with knowledge of chart patterns, and specialized indicators, can take advantage of short spikes in price, which should be easier for potentially quicker profits.
Combining Both Approaches on JustMarkets
The fact is that many effective traders who work on JustMarkets are using both fundamental and technical analysis. Fundamental analysis helps in understanding the macroeconomic environment while technical analysis assists in defining entry/exit points thus wanting up a trader’s trading strategy. For instance, fundamental analysis may show that a particular currency is probably going to appreciate in the long run and a trader may use technical analysis to identify when this is most favorable.
Conclusion
Finally, it is impossible to conclude that either fundamental or technical analysis is more effective on JustMarkets. Your choice will therefore depend on your goals as a trader, the amount of risk you would like to take and the amount of time available for making your analysis. If people pay attention to historical performance and numbers that determine economic outlooks that they think are most important, basic research would seem the most helpful. Technical analysis is helpful to people who want immediate trades and accurate timing. Through the tools and market resources for both types of analysis, one will find a strategy that fits its trading profile and gives the best possible outcomes on JustMarkets platforms.
