The forex market comes with two options of transactions i.e., spot and forward. A forward is a contract that is tailor made and it can be of any amount of money and can settle on any date if it is not a weekend of a holiday whereas in spot deals, funds are exchanged quickly within settlement dates. Future option is also similar to a forward deal but traded on exchange with a futures contract, with the buyer paying a value portion of the contract on up front basis. Futures are commonly domains of speculators and the contracts get closed before maturity. Forex analysis is better dealt with, if technical, using charting tools but also may be fundamental in nature using economic indicators and market news or events.
The retail forex dealers are usually users of forex market analysis for assessing trends in the forex market for their decisions whether to buy or sell a desired pair of currencies or currencies in hand. Forex trading strategies are used for analysis which may be available free of cost, attached with fee and the traders may themselves be experts in development of suitable analysis. The buy or sell decisions are usually influenced by forex market analysis indications.
Fundamental analysis routes is adopted for analyzing changes in the forex market by monitoring factors, such as interest rates, unemployment rates and GDP or gross domestic product. The economic news related to other countries is also useful in the analytical method. To the contrary, the aim of technical analysis is determine past price movement and in determination where a particular currency is heading. The technical analysis system can be based on manual or automated processes. Automated processes involve software development and associated interpretation.
There is no best method available and the dealer has to opt for either fundamental analysis or technical analysis, based on time frame, access to information and other factors meant for analysis. Depending upon the needs of the dealers and viable options, automated technical analysis may be preferred as a viable option for real time access to quotes. It is also suitable in case of short term trading preferences as economic date may be delayed and information gathered may be outdated. But for long term stakes, the dealer is not supposed to ignore the fundamental way of analysis as better option for obvious advantages associated with it.