When deciding metformin weight loss 500 mg on how to trade currencies or any other market for that matter, there are two main ways that traders will go about determining how to place their trades. These are known as technical analysis and fundamental analysis. You will hear very heated debates on which one is "best", and trying to convince another trader that your choice is better than theirs is somewhat like running on a treadmill. Yes, you go through the motions and get heated, but in the end you inevitably get nowhere. So instead of trying to give you competing arguments, I will try to lay it out as simple and neutral as possible here, although I do use one over the other most of the time.

The most basic way to express the difference between the two schools of thought is this: Technical analysis looks at charts in order to determine what is going on, and what will happen. Fundamental Analysis looks at things like economic numbers and political factors to determine the underlying value for a financial instrument. While there is great debate on which type of analysis is "better" than the other, the truth is that most traders find a nice blend of the two helps them in the long run. While you may be a primarily technical trader, you may also take into account things like employment numbers and interest rate statements to determine if you want to buy or sell a particular currency. It should be noted that most traders seem to be 90% of one and 10% of the other when they blend them together. It is probably human nature as you will be attracted to one or the other, while at least acknowledging the importance of the other.

Technical Analysis

The technical metformin er 500mg weight loss trader looks at charts for clues as to where buyers or sellers tend to step in and move the market. By its very nature, technical analysis assumes that the past actions of the market at a specific price should dictate what happens later at that same price. For example, if the USD/CAD currency pair fails to rise above 1.30, a technical analyst will assume that it will fail to rise above that same level the next time it reaches it. Of course, it isn’t always true, and the technical trader knows this. But the trader is simply trying to trade with the most likely outcome. Trading by its nature is simply playing the best odds.

A technical trader assumes that all of the possible news in a market appears in price. They also worry little about the economic numbers, and focus mainly on things like where a lot of buyers are likely to step in. They care little about "Why", but tend to focus on "What" when it comes to trading. As a matter of fact, I have said more than once that I don’t care why a trade is going in my direction just that it is. I don’t need to know why people are buying the USD/CAD at the 1.0000 level, just that they are. I am trading to make a profit, not to get an education. (Wow was I way off base, and try as I might, I still accidentally learn things from time to time!)

As you may have guessed by now, I am a technical trader. Most of the information contained in this series of educational lessons and videos are going to focus on technical analysis. However, this doesn’t mean that I ignore fundamentals, just that I only keep them in the back of my head most of the time.

Fundamental Analysis

The trader that relies on fundamental analysis is trying to figure out the underlying the value of a currency by the measurements that many of us know as economic indicators. All things being equal, when country A has a strong economy as measured by employment, interest rates, and GDP – the currency of that country should do quite well against the currency of country B, who might be struggling at the moment. This makes perfect sense, and gives the trader the general direction of the currency pair. Or at least where is should go. The reason that I emphasized that last part is that currency traders won’t always listen to reason. They are stubborn like that.

It should be noted that fundamentals do tend to work out over time. Fundamental traders tend to be working with longer time frames, and are counting on the markets to eventually go where money gets treated the best. In normal times, this is very true. In fact, any honest technical trader will tell you that it is the fundamentals that drive the markets over time. However, this type of analysis tends to lack clear entry and exit points, which is one of the most important parts of technical trading in my book.

I personally don’t harp on the fundamentals, but do tend to think of them when I trade. If I know a particular economy is a train wreck, I will avoid buying that currency. For me, it is just a matter of common sense, and paying attention to some of the bigger economic announcements keeps me at least pointed in the right general direction. Timing the entries and exits is completely up to me, and that’s where my technical analysis comes into play. Trends are driven by these fundamentals, and even technical traders follow them – albeit in the form of technical trade set ups.