To begin, let’s look at three ways on how you would analyze and develop ideas to trade the market.
- There are three types of market analysis:Technical Analysis
- Fundamental Analysis
- Sentiment Analysis
There has always been a constant debate as to which analysis is better, but to tell you the truth, you need to know all three.
It’s kind of like standing on a three-legged stool.
If one of the legs is weak, the stool will break under your weight and you’ll fall flat on your face.
The same holds true in trading.
Oh wait. Since the stool is supposed to represent how a trader goes about thinking and analyzing the market, it’s missing a brain.
But wait! The stool needs more brains!
There technically should be three brains….to represent the three different types of thought process…
Ahhh. There we go.
You need to have three “brains” when thinking about the market.
If your analysis on any of the three types of analysis is weak and you ignore it, there’s a good chance that it will cause you to lose out on your trade!
Reprinted from Babypips, the copyright all reserved by the original author.
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