The best forex analysis method

Just as is the case with any investing strategy, those who use foreign exchange (FOREX) as their investment tool have differing analysis tools to determine whether to buy, sell, or hold their currency.

For better or for worse, Forex analysis can be highly technical or very fundamental. In the case of most Forex traders, however, their investing strategy involves a combination of charting tools as well as economic indicators and news-based events. These tools are available for free, for a fee, or developed by the investors themselves.

Technical Analysis

Technical forex analysis is normally done with specially designed software, which is available for purchase or on any of several websites. These tools are generally very good and much the same. Differences are usually in the preferences of the users themselves. Whether the system is manual or automated, what these boil down to is the analysis of technical indicators that determine whether to buy or sell. As the user, you are basically programming the software to respond to your style of investing and reacting with indicators accordingly.

By Hook and Crook

Technical forex analysis differs from many investors who use their own variations of investing philosophy in that it removes the human element to give a purer form of recommendations, which other investors tend to rely on heavily. These latter types depend on the news as well as economic signals to tell them how to invest.

The “Best” Method of Forex Analysis

The truth is that there is no best way to analyze forex investing. If there was a “Holy Grail” or a “perfect” method, it would be under lock and key protection by a huge multinational corporation somewhere. Further, what is a good method of Forex analysis for one investor would be something different for another. Whereas one investor might swear by not only a software tool there would be a dozen others who would swear by another, and just as that argument was heating up, someone with their “gut reaction” methodology would swear by their own.

What is the best Forex analysis method? It depends almost exclusively on what you like and trust. It is also open to opinion. It can also depends on your own skills. Are you adept at using financial software? What is your access to information? What kind of time do you have to dedicate to the forex analysis?

Perhaps the most reliable method of forex analysis depends not only whether you prefer technical analysis or not, but whether you consider yourself a short-term or a long-term trader. For the short-term trader with only delayed access to Forex market information, a technical analysis is probably best. On the other hand, however, an investor who has more time to dedicate to their Forex trading and has access to up to the minute data, news information, and timely economic data, a manual method is often best.

The savviest investors have probably investigated both methods of Forex analysis strategies and determined what is best for them, in the short run as well as the long run. Regardless, what is best is what works best for the individual investor.