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Forex Trading and Market Noise


As a Forex trader you have the option of relying on Fundamental Analysis or Technical Analysis. Nevertheless, there is no single formula that will serve its purpose in a fluid environment like the Forex market.

Thus, to err on the side of caution, a prudent Forex trader will always rely on both fundamental and technical analysis to formulate his trading strategy. Use Fundamental Analysis to know how you can identify possible trends that can emerge. And then, use Technical analysis to help you confirm your hypothesis. The reason why we need technical analysis in our trading strategy is because it is purely objective.

Fundamental analysis relies on an element of subjectivity in order to arrive at its possible conclusion. By focusing on technical analysis to confirm our hypothesis, we are able to sift out the “Market Noise” which forms the bulk of market sentiments. We cannot avoid this “Market Noise” because it is everywhere around us, in the news we read, in the comments that people make and in the expert analyses.

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