Before opening a trade account, you have to define the market trends and analyze the market. You should understand the exchange rate of the chosen currency, whether it's the beginning of a positive trend or a negative trend that turns into a short-term pullback. Technical and fundamental analysis were developed to evaluate these fluctuations. The market has been divided into two camps - fundamentalists who trust only economic indicators when analyzing the market and technicians who rely on mathematical and graphical methods for determining currency rates.

Only you can decide what discipline to choose and what to rely on when analyzing the market. Each has its advantages and disadvantages. Which analysis is more logical to you? If you have a mathematical background, then you may feel comfortable with technical analysis. If the threats of inflation or unemployment scare you, then you may be drawn to fundamental analysis.

There is a third choice - traders who combine the best elements of both fundamental and technical analysis. Many consider this the future of analysis, but few people can evaluate both the technical and fundamental sides of the market. It is difficult to both estimate the number of indicators and understand the impact of economic news from around the world.

It is best to focus on one type of analysis at a time; however, it is sometimes acceptable to use an alternate form of analysis. You can switch methods if you have studied steadily and gained income, but haven't lost your appetite to learning something new or if you have found that studying this kind of analysis doesn't bring profit.

You only need to understand one type of analysis in order to trade effectively and successfully. So why do we need to learn all this stuff?