One crucial thing for every Forex neophyte to follow before investing their cash in Forex trading is mastering Forex analysis. Without properly calculating the currency pairs and where they are heading of too, it is impossible to come up a winning strategy.

Forex analysis proves to be the primary catalyst in Forex trading, and the earlier newbies understand this, the better it will prove to them in their future Forex ventures.

So if you are a neophyte Forex trader, then you have landed up in the right place as it discusses everything about Forex analysis. Just refer to the information below and gain enlightenment.

What is Forex analysis?

This analysis is defined as the evaluation of changes which take place in the Forex market. This analysis is mainly carried out by traders to check whether the market situation is suitable for purchasing or selling currency pairs.

  • Forex analysis can be done two ways. One is purely technical where study of charts, diagrams is done for market feeds. The other is the fundamental way using economic indicators, news and events from the world of Forex.
  • Fx analysis can be either manual or automated. But experts recommend going for the automated Fx trading type. They help to identify hidden market patterns, boots up your profit attaining possibilities and also operate for you round the clock.
  • It also takes human emotion out of the equation and makes way for rapid decision making.
  • You will find both these types obtainable over the World Wide Web.

One crucial thing to note down while conducting fx market analysis or using forex analysis software is that there is no specific holy grail for fx trading. A mode which might be suitable for one might prove to be inappropriate for another. Use your head; there is nothing like the perfect mantra for fx-ing because if it were, then these sellers would not have shared it with you in the first place.

Precise knowledge about Forex trading basics is a must

One wrong notion which young Fx novice have to get out of their system is their over reliability to Forex trading analysis tools.

You have to remember that Forex is carried out in a systematic process which involves both technical stats as well as a hardcore understanding of the market.

So, if you really aim for success in this field, then you will have to be precise not just with its technical aspects but with Forex analyse fundamentals too.

2 sterling modes of Forex market analysis:

The thing which you should keep in mind is the unpredictable and dynamic nature of the world economy. There are innumerable factors which can influence the market as well as your daily Forex analysis.

Experts state that you should always enter this venture covering all fx know-hows as only then will you be able to check the market. Only then will you be able to identify the profitable opportunities to trade.

For daily Forex analysis experts state two authentic methods. They are as follows:

Fundamental Forex trading analysis

One great mode which you can use for Forex market analysis is the usage of fundamental Forex market analysis.

This is somewhat the old fashioned mode of conducting fx analysis, but nonetheless, it is extremely important particularly for traders who aim for long term fx trading.

It contains knowledge about factors such as

  • Interest rates
  • Commodity prices
  • Geopolitical conditions
  • Growth rate of the economy
  • And the proportion of economic expansion


Let’s assume that a Fx trader is checking out the EUR USD currency pair through the help of this method. As this method does not involve any technical aspects and it purely based on hard core market research, he/she will have to check out the rate of interests of the Eurozone in contrast to that of the US dollar.

Along with that he/she will also have to be thorough with all the significant news updates which are taking place. The heath of the economy will also have to be given utmost consideration.

You have to know about these important factors as only then will you be able to make some inroads in your daily Forex analysis.

Technical Forex trading analysis:

However, experts say that for conducting an excellent Forex market analysis, this is simply not enough. Be sure that you are aware of the basic knowledge about the matter, but at the same time, you also need to use these aspects properly and turn the odds in your favour.

For comprehensive Forex analysis, usage of technical oscillators or tools is crucial. Technical evaluation in simple words means evaluating the market or economy with the help of adequate Forex analytics or fx tools.

This Forex analytics involves recognising patterns of the market, daily readings or fluctuations in gbp usd analysis, anticipating changes, etc.

Some of the popular Forex analysis tools are as follows:

  • Forex candlestick analysis- A Forex analysis chart which displays a pool of information about market direction through its pricing bars.
    This is definitely the most used tool followed around by fx traders, especially for neophyte traders.
  • Moving averages- Another tool for prudent Forex analyse shows the changes taking place in the market behaviour.
  • CCI or commodity channel index- This is one forex analysis indicator which indicates the oversold and overbought conditions.
  • MACD or moving average convergence divergence- This forex analysis indicator is used to show the relationship between 2 moving averages of price.

These are some of the popular Forex chart analysis that is highly recommended by experts as it is simple, reliable and makes way for an effective Forex analysis.

However, apart from these Forex chart analysis options, there are 2 more Forex analysis tools to use.

1. DMI or Directional movement indicator

It is a very common Fx trading tool which helps analyse whether a currency pair is trending or not.

2. Coppock curve

This is another fx analyses tool which helps forecast bear market flows.

What should be your first step to becoming a quality Forex analyst?

  • Simply start with a demo account, get used to the various Forex analytics such as daily gbp usd analysis, Fx analysis, market updates, the currency spreads, etc.
  • While practising with a demo account, you will also get familiar with the forex market situation as well as meta-traders like for example-mt4 and also mt5 Forex analysis, etc. Each forex analysis software has its own functionality. So it does prove to be a good option to try them out before you jump into the mainstream of things.
  • This is a complicated field, and hence you will have to do a lot of demo trading and go through a lot of Forex graph analysis to understand how the market functions. You can also refer to the strategies or discuss tips with an experienced Forex analyst.
  • One great thing which experts state regularly is, to begin with, a low sum. In that way, you can avoid the risk of losing a large sum of money.

Only when you become confident at it and can understand the market properly, then only should start with real currency trade.
As in the words of many experts-,‘ Fx trading is mainly about the mindset of a trader and how he perceives a particular situation.’

Final thoughts

After reading all the aforementioned information about fx analysis if you are interested in Fx, then join up with a trading forum immediately. Check whether it gives accurate gbp and usd analysis, has VIP bonuses, a free chat option as well as good meta-terminals and VNS servers for trouble-free trading. Also, check if the cost is low or not.

The venture offers huge money making probabilities. It’s about time that to availed them. That’s all for now. Hopefully, your trading career proves to be a profitable one

Happy trading!

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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