This article looks at the types of forex Singapore market analysis and how it is calculated.
There are three main types of market analysis undertaken in the forex Singapore trading market. There is constant debate among traders as to the one that offers the best results. To overcome this confusion, you should make the effort to understand the concept of the three methods. If you do this, you can attain a level of balance which will allow for one weak method to be carried by the others.
Fundamental analysis takes into account not only the economic environment of a country, but also its social and political environments, in a bid to determine how the supply and demand of the currency will be affected. The simple section of doing this type of analysis is the supply and demand indicators. The most difficult section appears when you have to do an analysis of the factors that could affect the supply and demand.
The idea that this method is based on is that if a country currently has a solid economy and there is no reason why this should change in the future, its domestic currency will rise in value. The reasoning is that when a country has a stable economic environment, investors will feel comfortable depositing their money in that country. This means the investors have to purchase the domestic currency which will make the currency rise in value due to the demand for it.
Technical analysis is used to study the movement of currency rates. It is based on the assumption that if you observe historical movements, you should be able to determine current and future movements in price and market conditions. It surmises that all the current information that is already in the market is shown in the currency price. If the information is already reflected in the price, you simply need to determine the movement of the price. Technical analysis works on the assumption that history will repeat itself.
An easy method to determine the price movement is to make use of charts. You can view the historical data and thereby determine the trends and patterns. This is an extremely important method of analysis in the forex market.
Forex Singapore Sentimental Analysis
It may be stated that current rates should be reflective of the market information; it is not as simple as that. Every forex traders has his or her views on the direction of the market and the reason for that movement. The forex market consists of many individual participants who have their personal views about the various factors in the market and this is where the sentiment in the market is born.
The main problem with this is that irrespective of your sentiments about the market, you cannot make the foreign exchange market move in your favour. If you believe that the Singapore dollar is set to increase in value, but none of the other traders believe that, there is nothing you could possibly do to change their views.
You have to bear all these different factors in mind to make a success in this market. As far as the direction of the market, you have to be both judge and jury. You will need to make decisions on how to handle market sentiment when it comes to placing your trades. You can choose to ignore the sentiment present in the market, but it may push you into loss situations more often than you want.
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