Fundamental Analysis Vs. Technical Analysis - Which is Better?

So now that we know what fundamental analysis and technical analysis are, it begs the question as to which is better. The answer varies depending on who you talk to and when you talk to them.

If you meet a fundamental forex trader with his boss next to him, the answer is the fundamental trader. The same also applies to the technical forex trader. None of the practitioners of these two forex trading branches wishes to admit that the other is just as good or better.

Over time, I have discovered the adage "give unto Cesar what is Cesar’s"... in other words there is a place for both forex trading branches and also a right time for each.

Technical analysis is especially important for the short term day trader. More so than to the long term trader who is not moved by the day to day currency moves. Every time I tried to put my fundamental ideas in a day trade, I usually ended up very disappointed.

The fundamental trader who ignores technical trading is also in danger of losing out in the market. Even if you predict that a currency is going to go higher, if there are technical indicators like support lines that are about to be broken, it is prudent to be patient.

One of the best technical trading tools I have seen is the support and resistance lines. If either of these is broken, it is very unlikely that even the best fundamental analysis can beat it.

To me the question is not who is better trader, the question should be: why not use both trading methods to confirm your forex trades? I can assure you that if your fundamental analysis agrees with your technical analysis, you have a very high probability of making a very profitable forex trade. The best forex traders learn both and apply each in its proper place.

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