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Technical and Fundamental Analysis in Currency Trading
Currency trading is not just about luck—it’s about informed decision-making based on solid analysis. Two primary types of analysis are used in forex trading worldwide and in Pakistan: Fundamental Analysis and Technical Analysis. Whether you're trading currency futures at PMEX or observing the USD/PKR spot rate for trends, understanding these tools is critical for success.
In this chapter by Azee Securities, a licensed broker with PMEX, we will explore how each type of analysis works and how you can apply them in the context of Pakistan’s currency market.
Fundamental analysis focuses on evaluating the economic, financial, and geopolitical factors that influence a currency's value. It attempts to determine the "true value" of a currency based on macroeconomic indicators and events.
Technical analysis involves evaluating price charts, patterns, and indicators to predict future price movements. It is based on the idea that historical price movements tend to repeat themselves due to market psychology and supply-demand behavior.
Technical analysis is widely used in short- to medium-term trading, especially by day traders and scalpers trading on PMEX currency futures.
Aspect | Fundamental Analysis | Technical Analysis |
---|---|---|
Timeframe | Long-term | Short- to medium-term |
Focus | Economic & geopolitical factors | Price trends, patterns & volume |
Data Type | News, macroeconomic data | Charts, indicators, historical price |
Best For | Position Traders, Analysts | Day Traders, Scalpers, Swing Traders |
A smart trader doesn’t choose one or the other—they combine both to develop well-rounded strategies.
At PMEX, currency trading is done through futures contracts, such as USD/PKR. You can apply both types of analysis as follows:
As a client of Azee Securities, you receive:
Ready to start your investment journey with Azee Securities? Open a Stock Trading Account and gain access to the Pakistan Mercantile Exchange (PMEX). Let Azee Securities help you make informed decisions. Our expert advisors, advanced trading platform, and real-time market data ensure you stay ahead of the curve.
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