forex™
Fundamental Forex Analysis
(and leading market (economic) indicators)
Technical analysis for forecasting future price
Fundamental analysis is
a method of forecasting future price movements of a financial instrument based
on economic, political, environmental and other relevant factors, as well as
data that will affect the basic supply and demand of whatever underlies the
financial instrument. In practice, many market players use technical analysis in
conjunction with fundamental analysis to determine their trading strategy. One
major advantage of technical analysis is that experienced analysts can follow
many markets and market instruments, whereas the fundamental analyst needs to
know a particular market intimately. Fundamental analysis focuses on what ought
to happen in a market. Among the factors considered are: supply and demand;
seasonal cycles; weather; government policy. The fundamental analyst studies the causes of market movements, while the technical analyst studies the effect. Fundamental analysis is a macro, or strategic, assessment of where a currency should be traded, based on any criteria but the movement of the currency's price itself. These criteria often include the economic conditions of the country that the currency represents, monetary policy, and other “fundamental” elements.
Many profitable trades are made moments prior to, or shortly after, major economic announcements.
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Leading economic indicators
The following is a list of economic indicators used in the USA. Obviously, there are many more, as well as those of other leading economies (such as Germany, the UK, Japan, etc.). In general, it is not only the numerical value of an indicator that is important, but also the market’s anticipation and prediction of the forecast, and the impact of the relation between anticipated and actual figures on the market.Such macro indicators are followed by the vast majority of traders worldwide. The “quality” of the published data can differ over time. The value of the indicator data is considered greater if it presents new information, or is instrumental to drawing conclusions which could not be drawn under other reports or data. Furthermore, an indicator is highly valuable if one may use it to better forecast future trends.
Note that in the USA most indicators are published on certain weekdays, rather than on a particular monthly date (e.g. the second Wednesday in each month, as opposed to the 14th of each month, etc.).
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Easy-Forex™is dedicated to educating its customers. Customers can access FREE 1-on-1 online training. The training goal is to teach people specific strategies for trading currencies over the internet. Both novice investors and expert day traders have benefited from the training provided by Easy-Forex™.
