![\"Technical](\"https:\/\/bpcdn.co\/images\/2011\/03\/24212323\/battle.png\")
<\/figure>\n\n\n\nHardcore traders in the technical analysis camp scream, \u201cFundamental analysis doesn\u2019t matter! FU to FA! It\u2019s already embedded in the price, which you can see on the charts!<\/strong>\u201d<\/p>\n\n\n\n Hardcore traders in the fundamental analysis camp scream, \u201cTechnical analysis is just a bunch of imaginary lines and drawings! Useless fake voodoo magic! TA is BS!<\/strong>\u201d<\/p>\n\n\n\n While folks in the sentiment analysis camp are\u2026.observing the two camps fight and monitoring their level of sentiments of each other! ?<\/p>\n\n\n\n Fortunately, the different types of market analysis complement each other<\/strong>.<\/p>\n\n\n\n Even hardcore technical traders may find useful fundamental nuggets that can help with their technical analysis. And vice versa.<\/p>\n\n\n\n In real-world markets, prices are constantly changing, and usually develop trends. Those changes in prices can and do affect fundamentals.<\/p>\n\n\n\n This means that trends in prices affect fundamentals just as fundamentals affect prices<\/strong>.<\/p>\n\n\n\n And as you\u2019ll find out in later lessons, identifying trends is a huge part of technical analysis.<\/p>\n\n\n\n Do not be fooled by these one-sided extremists! One is not better than the other\u2026they are all just different ways to look at the market.<\/p>\n\n\n\n At the end of the day, you should trade based on the type of analysis you are most comfortable and profitable with.<\/p>\n\n\n\n To recap,\u00a0technical analysis<\/strong>\u00a0is the study of currency price movement on the charts while\u00a0fundamental analysis<\/strong>\u00a0takes a look at how the country\u2019s economy is doing.<\/p>\n\n\n\n Market\u00a0sentiment analysis<\/strong>\u00a0determines whether the market is bullish or bearish on the current or future fundamental outlook.<\/p>\n\n\n\n Fundamental factors shape sentiment, while technical analysis helps us visualize that sentiment and apply a framework to create our trade plans.<\/strong><\/p>\n\n\n\n Those three work hand-in-hand-in-hand to help you come up with good forex trade ideas.<\/p>\n\n\n\n All the historical price action and economic figures are there \u2013 all you have to do is put on your thinking cap and put those analytical skills to the test!<\/p>\n\n\n\n Let me pull out that three-legged stool again just to emphasize the importance of all three types of analysis.<\/p>\n\n\n\n Take out one or two legs of the stool and it\u2019s going to be shaky, right?!<\/p>\n\n\n\n In order to become a true forex trader, you will need to know how to effectively use these three types of market analysis.<\/p>\n\n\n\n Don\u2019t believe us?<\/p>\n\n\n\n Let us give you an example of how focusing on only one type of analysis can turn into a disaster.<\/p>\n\n\n\n (Note: This was not based on a real story. This did not happen to us. We were never this naive. We were always smart forex traders\u2026 From the overused sarcasm, we think you get the picture.)<\/p>\n\n\n\n Ok, ok, so the story was a little over-dramatized, but you get the point.<\/p>\n\n\n\n Remember how your mother used to tell you as a kid that too much of anything is never good?<\/p>\n\n\n\n![\"Three](\"https:\/\/bpcdn.co\/images\/2011\/03\/16185905\/types-of-market-analysis-three-bsrain.png\")
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![\"Fundamental](\"https:\/\/bpcdn.co\/images\/2011\/03\/17225222\/two-birds-360x114.png\")
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