There are two main types of analysis when it comes to Forex - fundamental and technical analysis.
Fundamental analysis is a way of looking at the Forex market by studying and analysing the impact of political, economic and social factors on the relative value of a certain currency.
In other words, fundamental analysis is the study of what is happening in the world in both, economical and financial sense, and it tends to focus on how macroeconomic elements (e.g. the growth of the economy, inflation rate, interest rates, unemployment rate) affect the financial markets.
The idea behind fundamental analysis is that if a country's economic outlook looks good, the value of its currency is likely to strengthen as other countries and investors are likely to increase business with them, furthering demand for their currency.
On the other hand, if a country's economy looks unstable, the value of its currency is likely to decrease. In other words, the better shape of a country's economy, the bigger the demand. The worse shape of a country's economy, the lesser the demand.
Just like any job, trading Forex comes with risks and emotions.
And learning to manage and control them is a crucial step in becoming a trader.
Now, let's be honest, the weakest part in any trading strategy is always the trader themselves.
The good news is, overcoming our blocks and learning from our mistakes is no rocket science and it can be done by educating ourselves and working on the right things.