Did you know that ancient traders purely used fundamental analysis to analyze where the market will move. Traders who use fundamental aspects such as various conditions, instruments, and policies of the government or the central bank in establishing market balance conditions are known as "fundamentalists". Generally, fundamentalists will pay attention to economic indicators such as Gross Domestic Product, Unemployment Rate, Salary Increase, Retail Sales, Inflation Rate, and others.Until the late 1970s, the use of technical analysis was still considered mystical. In the early 1980s, traders began using technical indicators in their analysis. The reason for this transfer is primarily money.
Fundamental analysis is considered to be less effective in making money unless it is used for investment in the long run. According to Mark Douglas in his book "Trading In The Zone", it is not the result of economic indicators of a country that drives market prices, but it is the expectations, expectations, and actions of market players that can drive prices. With a volatile market situation, pure fundamentalists find it difficult to determine when it's time to enter, exit, or maintain a position in the market.
If you ask is there a weakness in technical analysis? Yes, there are also gaps in technical analysis. The gap is between things that a trader understands about the market, and the ability of a trader to make that knowledge an opportunity.
There is a big difference between predicting something will happen in the market and reality about whether we really enter and make money in that market. This gap is called Psychological Gap.
Have you ever seen a chart, then it occurred to this market to rise, but didn't have the courage because you had suffered losses in a row before? Then find the market really moves according to initial estimates. Yes, this is what makes trading with technical analysis difficult
Linkback: https://www.forex.zone/general-forex-discussion/1/trading-is-not-always-about-fundamental-or-technical/1938/