Trading question - Fundamentals vs Market Sentiment

[Jenithetradegirl]

Hey guys, I wanted to ask this from the experienced traders. I have been trading for a year so I am an absolute newbie. Is forex trading primarily driven by fundamental factors or market sentiment?

 

[FxMaster]

Hey guys, I wanted to ask this from the experienced traders. I have been trading for a year so I am an absolute newbie. Is forex trading primarily driven by fundamental factors or market sentiment?

Forex trading is influenced by a combination of fundamental factors and market sentiment. Both play significant roles in shaping the direction and volatility of currency pairs.

Fundamental factors refer to economic indicators, news events, monetary policies, geopolitical developments, and other factors that impact the underlying economies of the currencies being traded. Fundamental analysis involves evaluating these factors to assess the intrinsic value of a currency and predict its future movements. Traders who rely heavily on fundamental analysis study economic data, central bank statements, and other relevant information to make trading decisions.

Market sentiment, on the other hand, refers to the overall attitude and emotions of market participants towards a particular currency or the forex market as a whole. It can be influenced by factors such as investor confidence, risk appetite, economic outlook, political stability, and market trends. Market sentiment can drive short-term price movements and lead to periods of high volatility, even if fundamental factors might suggest otherwise.

While fundamental analysis provides a long-term perspective and helps determine the underlying value of a currency, market sentiment often influences short-term price fluctuations and can override fundamental factors in the immediate term. Traders need to consider both fundamental factors and market sentiment to make well-informed trading decisions and manage risk effectively.

 

[Nicholasbrownie]

Hey there! As an experienced trader, I'd say forex trading is influenced by a mix of fundamental factors and market sentiment. It's important to keep an eye on both fundamentals and market sentiment to make informed trading decisions

 

[Paulina_wagner]

Fundamentals like economic indicators and news impact long-term trends, while sentiment reflects the mood and emotions of traders, causing short-term fluctuations

 

[aldangar]

From my experience forex is driven my price action after fundamental market moves. ie fundamental news event will make large pip movements in the market then price action will follow until the next news event

 

[henyo]

I might be wrong here, but it is driven by both, but at times sentiment over weights funda. its pretty prominent in crypto trading how much sentiment can bend markets, it happens in forex as well but not as noticeable, keep an eye on what might come as people's thought. and pls dont take my word literally, i mean i always say this, i might be wrong too.

 

[HungTrading]

Hey guys, I wanted to ask this from the experienced traders. I have been trading for a year so I am an absolute newbie. Is forex trading primarily driven by fundamental factors or market sentiment?

It's driven by traders' sentiment, by what they are thinking about the market. Fundamental factors are what affect sentiment.

 

[bigdolly]

Hey guys, I wanted to ask this from the experienced traders. I have been trading for a year so I am an absolute newbie. Is forex trading primarily driven by fundamental factors or market sentiment?

The price is a combination of a trend and noise. Fundamental analysis aids in predicting trends, while changes in market sentiments create noise. If you want to make the most of fundamental analysis, it's advisable to focus on long-term trades because price is guided by trend only in long-term (check S&P 500 monthly chart)

 

[aprillioo]

Great question. Is there such a thing as an automated trade tracking journal?

 

[NatureGirl]

Hey guys, I wanted to ask this from the experienced traders. I have been trading for a year so I am an absolute newbie. Is forex trading primarily driven by fundamental factors or market sentiment?

its a mix and tey both play their roles and the best strategy considers both