Fundamental analysis is the answer to all the questions such as how do forex traders plan their tactics? What do FX traders do to make their currency trading plans? and many more.
This analysis not just informs the traders about the positive or negative on currency prices but also analyse various other factors such as the inflation rate, economic policies, growth rate etc. which makes it an important part of currency trading and better edge in FX trading.
The most important question that often confuses the FX traders specially beginners is - How do forex traders use basic analysis for foreign currency exchange and trading?
Fundamental analysis needs comprehensive learning and expert understanding on fundamental concepts that how situation affects the forex trade market. But once understood clearly fundamental analysis can prove to be the most significant step in forex trading. Almost all experienced forex traders and forex brokers plan their strategies on the basis of fundamental analysis. Commonly, It is used with technical analysis in which the it shows various causes of market movements and the technical analysis explains the effects.
The factors on which the fundamental analysis is based are following:
First and most important factor is the fundamental economic analysis by which the analyst defines the power of economy in today and in future through Gross Domestic Product (GDP), foreign investments, stock prices and various other factors.
Second factor on which the fundamental analysis is based on is the interest rate, which directly affects the economic growth, which means if the interest rate of a particular currency will increase then the price of that particular currency will also move up because of higher foreign investments.
And the third and another important aspect is the commodity price analysis, which means the price of a commodity decides the economic growth of certain country.
Therefore, the prices of gas, oil gold, silver etc. are major factors of consideration during fundamental analysis. In the present financial state when the foreign currency exchange markets changes with a blink of an eye, it is very important for the forex traders to follow this analysis because without this analysis, it is very difficult for any forex broker or trader to get appropriate FX trading judgments.
As much as I respect fundamental analysis, I always combine it with my technical analysis. I use technical analysis 90% of the time because I think the market is 90% technical.I use fundamental too to watch out for heavy momentum in the market.The news I respect most are NFP and interest rate.
BalasHapusBosun
FxGlory remains my best broker since 2014.
. My students do ask me alot of questiosns about so many conventional statements in forex trading.But the very question that they ask more often than not is this; "We are told to sell high and buy low, is that not counter trend trading?" Not at all, buying low simply means buy the low in an uptrend and sell the high in a downtrend.That is the way to trade the trend.
BalasHapusBosun
FxGlory remains my best broker since 2014.
What Is The Best Time Frame To Rely On In Forex?
BalasHapusMost professional forex traders spend their time analyzing time frames of the four-hour chart and higher, the one-hour time frame can be useful for refining entries, but anything less than this and you are simply rolling the dice. So, step one to trading like a professional is to fully accept that higher time frames display a much more accurate and useful view of the market than their noisy lower-time frame counter parts. The bottom line is that to fully develop your Forex trading skills you need to learn to trade the higher time frames before you do anything else.
Bosun
Have a glorious experience trading forex with FxGlory.No slippages.No delay of payment of withdrawal requests. My best forex broker since 2014.