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Chapter 21, Part I. Again about Fundamental Analysis Page 4

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 22, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    By the way, if want to be up to date with the current macro data picture, visit the FPA's Current Forex Daily Trading Signals folder every day:

    Current Forex Trading Signals

    Also I have to say, that while some macro data is important itself, no less important (or even more important) is the market’s expectation or, say, prediction of that number. To make a judgment about how the actual number compares to forecasted number and how difference between them could influence market price action. All these things demand analysis before pulling the trigger.

    Pipruit: Ok, let’s assume that some report just has been released…​

    Commander in Pips: Right. The market will behave depending on how traders assess the results of this release. According to what we’ve said above – how the actual figure corresponds with expectations, what actual figure stands itself, how it influence on the overall fundamental picture of a particular country that the currency belongs to. The first two points usually impact market fast, but the last one shows its influence during an extended period of time, sometimes right until the next release.

    Pipruit: Oh, now I see. But Sir, in the time of release there are so many different opinions… Could it lead to a lot of uncertainty, even when we will see some particular number?

    Commander in Pips: Yes, in fact it could and you will never able to point 100% correctly the direction that the market will take. But this is not a reason to abandon fundamental analysis.

    Understand that there are a lot of numbers, events appear on market day-by-day and many of them are significant. Traders and analytics need time to integrate them into the whole picture. And that is just data for some particular currency. But there is data for the other currency in a pair and for all other currencies as well. Traders have to combine them to make an acceptable assessment of economic perspectives and, hence some currency pair perspectives.

    Pipruit: Although you’ve promised me that this will be simpler – it doesn’t sound simpler. May be I should not use fundamental analysis at all?
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