An integrated approach – the best trading strategy. Alexander Sivtsov.

Each trader, a beginner, as well as quite experienced, knows that in order to obtain a good result in trading, one must be guided in analyzing the state of the market and be able to predict the further movement of the price of the instrument. An integrated approach is the best trading strategy. Why?

As you know, there are three main types of market analysis: fundamental, technical and computer. Let’s discuss briefly each of them.

Fundamental analysis

Fundamental analysis is the analysis of various factors influencing the value of a financial instrument. It is based on the analysis of economic indicators of the country, its currency, which is traded on the Forex market. Analysis of political and force majeure factors that also affect the value of the currency of a particular country. The main task of fundamental analysis is the forecasting of further changes in the price of a particular currency instrument.

Technical analysis

The basis of technical analysis is the work directly with the price chart of the currency instrument, the construction of trend channels, determination of key price levels, as well as the identification of basic candle models and figures of technical analysis. The task of technical analysis is to determine the entry and exit points from the market.

Computer analysis

Computer analysis is the analysis of the price chart of the instrument using various indicators and oscillators. Just like in the situation with technical analysis, a computer one allows you to determine the entry and exit points from the market, but unlike the technology, indicators will show the entry point only at a certain moment, because by means of technology the entry and exit points from the market can be determined in advance.

Why is an integrated approach the best strategy?

Most traders who use only one of the above types of analysis in the process of trading, in fact, go on a unicycle – it’s possible, but not for everyone. In turn, the integrated use of all types of analysis allows you to make a profit, both for a beginner and an experienced trader. For the basis, select one type of analysis, and the other two use as confirmation for the conclusion of a transaction in the market.

For example, in the trading process you rely on technical analysis and you see on the chart an excellent entry point to the market. For instance, the price has come close to a significant suppot level, from which it is logical to make a purchase of the instrument, but first you need to make sure that the transaction does not contradict the fundamental factors or indicators, which will give you more confidence in concluding the transaction and help to better balance the risks.

Relying more on fundamental analysis, the other two types of analysis will indicate whether to enter the market based on the foundation or not. For example, published data on changes in the interest rate of one of the Central Banks had a significant impact on the movement of a certain instrument of the currency market. In this case, an integrated approach is on your side! Computer and technical analysis will allow us to estimate the duration of the instrument’s movement on the basis of this fundamental factor and extract the maximum profit from the transaction.

More details on the main types of analysis of financial markets and their integrated application can be found during the training courses by specialists of the Ester Holdings Inc. Improve trading skills – and be rich!

Alexander Sivtsov