How to do fundamental analysis in Forex

Forex traders just like the stocks, Indexes, commodities, options, Futures, spots and precious metals traders rely on the two traditional forms of analysis, that is, fundamentals and technical analysis to predict the direction of the securities in question.

Fundamentalist are more concerned with the intrinsic value of an asset while the technicians are for the price action.

However, most swing traders combine both the fundamentals and technicals to make a buying or selling decisions.

Do you think that adding fundamental analysis to your technical analysis will help improve your trading experience?

In this blog post, you are going to learn how to apply the fundamental analysis and technical analysis to close more winning trades.

This post will answer the following questions that have been bothering you for quite some time now;

1; What does fundamental analysis mean?
2; How do you trade with the fundamentals?
3; What are the sources of fundamental data
4; What are the actual fundamentals in forex?

Without wasting time, we are going to set the ball rolling by going deeply into our today’s discussion.

1; What does fundamental analysis mean?

Fundamental analysis in forex trading is a technique that looks into the economic factors and key financial numbers like the nonfarm payrolls, interest rate decisions, Gross domestic products, manufacturing and services (PMIs) and retail sales to determine and predict the direction of the currencies.

Key economic numbers determine Volatility in the market. It is Volatility that traders are more concerned with as it indicates moments of high probability of winning trades.

2; How do you trade with the fundamentals?

As a trader, you must know when the economic data will be released so that you are able to use the information as soon as they occur.

It is also important that you are familiar with what the data means. You should familiarize yourself with the information that the data is passing to investors and traders.

Having known the dates of release of most economic data and what they mean, it’s now your high time to determine how to trade with such information at hand.

There are three ways to trade the news, you can trade before the release of important news, on the release or after the release of earnings and economic news.

Traders who trade before the release of economic news normally do so in order to take advantage of the involatility that normally precedes the release of economic data. This traders normally employ range trading strategies.

Traders who trade on the release of major economic data are those who use the Volatility trading strategies and are looking to capitalize on Volatility that normally follows the release of economic information.

On the other far end on the spectrum are the traders who trade after the release of economic news and when a clear trend has emerge. This traders normally avoids the turbulence of the market and only bulls the trigger when they are sure with what they are doing.

If you are a full time trader who seeks to be in the market full time, you can look into all these ways that can will assist you to get the most out of the different phases of the market.

3; What are the sources of fundamental data?

Investing app. This mobile app from is an excellent resource for traders and investors alike as it has numerous economic data that will help skyrocket your trading data bank.

Seekingalpha; Do you want to assess breaking news as they actually break? Then, SA is your platform of choice. With SA, you will be able to get in touch with news as they develop from around the world from this sites bank of talented authors.

The best economic calenders are those that enabless you to choose the time zones, the currencies and the type of data that comes into your news feed. is yet another tool that you should have in your toolbox. With Barchart, you will get assess to several free trading analysis tools.

4; What are the actual fundamentals in forex?

Gross domestic product (GDP) is a measure of the market value of all goods and services produced in a country in a given year.

Traders don’t have to wait for the GDP report as it’s figures are actually lagging indicators. Advanced and preliminary reports are what traders rely on to make informed decision of the financial health of a country.

Retail sales; If you want to figure out the immediate direction of an economy, then you will want to find out the country’s consumer spending patterns, the retail sales of a country measures the total receipts of all retail stores in a country.

In conclusion
Traders who trade forex and other securities should add fundamental analysis to their trading strategies.

Your weekend analysis should have a place for fundamental analysis as a way of gaining the bigger picture of what is most likely to take place during the course of the week.

If you are considering trading as your new venture, you can open an account with hot forex,this is the broker that I am using and you can open an account with as low as ksh 1000.

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