There are three major branches of technical analysis in the Forex market. The first branch is known as the technical analysis and the second branch is the fundamental analysis. People always learn these two factors and start trading the real asset. The third branch is the sentiment analysis and without understanding the sentiment of the market, you can’t become a profitable trader. Many traders in Hong Kong often think they can’t learn to analyze the sentiment of the market. They think the experience will help them to understand the market sentiment. Things have changed a lot and the advanced traders have found a unique solution to this. If you manage to learn fundamental analysis, you can expect to assess the sentiment of the market. In other words, without having strong knowledge of fundamental analysis it’s not possible to master sentiment analysis skills.

What is the fundamental analysis?

Studying the economic news, events and other important factors affecting the price of a certain asset is known as fundamental analysis. Some of you might not agree that fundamental analysis is required to find the best signals. Many traders’ claims that they can make a big profit based on technical data. Though technical data can help you to secure decent signals you will never understand why the market is behaving in a particular way.

Let’s say, you have executed short orders in the EURUSD pair after a break of the neckline in the head and shoulder pattern. You will think the sharp fall in the price is the result of the breakout. But the skilled traders in the Forex trading industry will analyze the news. And they will notice that the bearish momentum is nothing but the reflection interest rate hike from the FED officials. Both levels of traders would have made a profit but those who know fundamental analysis would have a clear idea about the downfall in price. So, it’s your choice to determine whether you will learn to analyze the fundamental factors.

High impact news

Instead of analyzing small impact news, you should start analyzing the high impact news. By analyzing the high impact news you can trade the major breakout in any pairs. However, learning to assess the major news will be a complicated task since you will have to relate the news data with the direction of the price movement. To avoid unnecessary hassle, it is highly recommended that you use the Saxo demo account to learn the correlation between news data and technical variations in the price. Once you find the correlation, analyzing the fundamental news will be an easy task.

Medium impact news

Once you have the idea of analyzing the high impact news, it’s time for you to learn medium impact news analysis. This is necessary because it will help you to find the endpoint of the retracement. Once you learn to understand the retracement phase in any trend, you can execute quality trades at the period point. But never think you can master the art of medium impact news analysis process within a few months. It’s more complicated since other associated variables are affecting the price.

Compile your knowledge

After getting a fair idea about the importance of news factors, most of the traders will start learning to analyze the news data. Before you start to use the news data, learn to compile things. But compiling technical and news data you can develop a robust trading strategy that can help you to make a profit at any market condition. Being a Forex trader, you have to think smartly. Try to analyze all the minor details of the market since it’s a great way to improve your performance. Once you master the art of trading, you won’t have to worry about your financial freedom.