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Forex Trading - Which is Best Fundamental or Technical Analysis?

If you are a forex trader, you can either trade via fundamental analysis or technical analysis but which is best? Lets compare the advantages and disadvantages of each.

Fundamental Analysis

Currencies are affected by the fundamentals and these include:

The political situation, strength of the economy, government policy, the interest rate outlook to name just a few.

These are FACTS and the various participants look at them and decide which way prices should go.

The main advantage is:

The direction of the currency is normally in line with the long term fundamentals and this is reflected in currency trends lasting for months or years in line with economic and political cycles.

The main disadvantage is:

The people who look at the fundamentals are NOT making logical judgements they are influenced by the emotions of greed and fear.

We all have the same facts to look at but we all make

subjective judgements on what the facts mean.

This means that price spikes are common and these don't always reflect the fundamentals
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