) Forex Trading - Why Forex Traders Prefer Technical Analysis

Until relatively recently fundamental analysis, or looking at past political and economic events to help them predict price movements in the underlying currencies they traded, is how most traders arrived at trading decisions.
However, fundamental analysis requires a trader to absorb lots of diverse information from many sources and considerable knowledge to interpret it accurately. Couple this with basic disagreements as to what information is important and what weight to assign it and you can begin to see why this method took enormous resources and time. Two characteristics not commonly associated with the individual investor.
The end result was that for years currency trading was the exclusive playground of large banks or other institutions with the resources to accomplish this type of analysis
Now, the rise of computing power and the proliferation of electronic information sources have lead to a fundamental shift in the way most traders analyze the Forex market.
Today most traders employ another, more automated, form of analysis known as technical analysis. This involves the combined charting of real-time and historical price movement data of currencies. Today this is mostly accomplished using computers which have the ability to do the sometimes complex math quickly in near real-time.
Technical analysis really boils down to simply taking the over one hundred years worth of recorded historical price data available from the foreign currency market and running it through a computerized charting application to look for patterns and trends.