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Which it the Forex analysis to generate big profits? Here we will look at a powerful way to conduct your Forex analysis and get on the right side of all the big Forex trends that make the big profits.

In terms of Forex trading analysis, traders either tend to pick fundamental analysis or technical analysis, let’s look at the advantages and disadvantages of these two methods of analysis.

Fundamental Analysis

Studies the supply and demand facts and prices do move to the big long term fundamentals but their extremely hard to judge, as prices don’t move based on the facts but on how investors perceive them and their judgement, is not logical but coloured by their emotions.

The above is clearly shown by the fact that markets collapse when there most bullish and rally when there most bearish.

Technical Analysis

Simply assumes that all the fundamentals will show up in price action, it’s actually a short cut form of fundamental analysis, because in a world of instant communications we all have the news at a click of a mouse and how investors perceive it will quickly be reflected in chart action.

The Forex chartist doesn’t care why prices are moving he just wants to lock into and profit from price trends.

Using Forex charts simply sees the chartist look out for repetitive chart patterns which are the product of human psychology which is constant and it’s a fact that, several chart formations repeat and repeat again and can be traded for profit.

Both the above methods have pros and cons and for the Forex trader the most time efficient way to trade is to use Forex charts and simply follow trends either up or down.

The Best Methodology for Chartists

When using Forex charts, the best way to trade is not to predict in advance but to trade the reality of breakouts to new highs and lows on a Forex chart. All big trends start and continue from breakouts, so by buying significant breaks of resistance and selling breaks of support, you can make a lot of money.

Most traders want to predict and don’t use breakouts but a look at any Forex chart will show you it’s the best way to make money.

You need to pick good breakouts i.e. levels the market feels are important and if you do, trading just once or twice a month, you can make triple digit gains.

So what are the best breakouts to trade?

We will look at this timeless way to make money, in part 2 of this article series on Forex Analysis and show you how, it can lead you to long term currency trading success.