Tips on “Mating” Technical Analysis Fundamental
There are two analytical techniques known among traders, namely fundamental analysis and technical analysis. Fundamental analysis takes decisions based on market news and economic data. Technical analysis uses price movement data, as well as chart indicators from the trading platform.
Indeed, in technical analysis there is an expression that “all actions are discounted prices”. People who only use technical analysis believe that they are able to analyze it well regardless of fundamental data at all. But apparently not all traders are confident and apply this concept as a whole. For some reason, they still cannot escape monitoring and observing economic data and are very careful. They choose to get clearer instructions about where the next market will go.
Nothing wrong with being a true technician. That is its own advantage. However, for those of you who are not too sure, there is no harm in combining fundamental analysis with technical analysis.
Now, without intending to defeat the concept of “discount all price action”. This time we discuss how to combine fundamental and technical analysis as an alternative step to analyze.
1. Look at the technical factors first
The first thing you have to do is of course see the latest price trends.Does the price move in an uptrend? Downtrend? Or sideway?
We know that the safest position in trading is the position / transaction in the direction of the market. So if we see the market is moving in a state – for example – an uptrend, then we should be prepared to take long positions. The opposite is true.
2. Observe the fundamental factors and then match the technical factors
Pay attention to important economic data or commonly referred to as “big figures”. You can get those data in the economic calendar that is on our website.
If you find economic data about a particular currency analysis, you should match it with technical analysis. Notice whether this currency is also in an uptrend. If so, then you can be prepared to buy the currency when the economic data release is positive as expected.
For example: there is “Retail Sales” data from the UK to be released which estimates GBP is a positive trend. Technically, GBP / USD is also in an uptrend. So when the Retail Sales data is released according to the forecast (up), you can immediately take a GBP / USD buy position.
3. Get to know the “danger” signal to get out of the market immediately
Not all trades end with “happy ending”. There are times when the market does not respond to the data released, in theory it should strengthen but weaken. Now, you must be able to see signs through technical analysis: when to exit the market …
The principle is actually simple. In technical analysis you will be able to recognize support and resistance levels. If you take a long position, beware if the support breaks. Conversely, if you take a short position, be careful if it turns out later the resistance breaks. At times like that you should think about closing your position in order to avoid the risk of greater losses.