Novice Forex traders believe that fundamental analysis is something very difficult, which requires higher education in economy, outstanding intelligence and heaps of free time for analyzing statistics, ratios, etc.

This is not true. Fundamental factors are not as difficult as lot of people think. In fact, this approach is very simple. In this article I will tell you my personal opinion on fundamental analysis, which I think is right and practical. This is purely my opinion, how to use external data in trading. This is not the ultimate truth, but I believe this method is simple and effective.

For beginning, let's look at the definition of fundamental analysis.

Fundamental analysis is an analysis of the situation on the foreign exchange market and related projections based on data that do not directly relate to the charts. This analysis based on the economy, the news of the current situation in the foreign policy of a country, as well as other factors. For example, prices for oil, gold, unemployment and other data that are not related to technical analysis.
If you go to a site with some analytics, you will see a lot of news.

And every day there is something new:
Casting a quick glance at news, trader immediately tries to find the relationship among its news and to make any conclusions. And then he goes to charts and on the basis of his findings building his trade. And there is quite different picture that seems to be in direct contravention with fundamental news. All this seems very difficult and confusing. But in fact, the fundamentals are not as difficult as many think.

The secret is very simple approach. At any time, the market focuses on one or two factors, which are easily identified.
How to understand which are these factors? Literally says, them will be screamed at each corner.
You will find them at the most sites for ordinary people: for example, the usual news on the national channel, or in the newspaper.

In order to understand what affect the currency market now you does not need to go deep in FA news. Just remember situation with Greece this summer how it impacts on EURUSD. There was a lot of fear that at any time declare a default by Greece. It was expected. There was not any single trader, who believed that will gap up. Everyone was waiting that EUR goes down, and it happened.

Now I will tell you how to work with news. It is very simple. Couple of times per day you need to open news sites. View the most of headlines. And based on this information you should make some conclusions. Usually the meaning of the news fully reflected in the title. And in order to understand that the same news repeated, but in a different context, are not required going into every article and studying it thoroughly.

If you suddenly see something strange for ordinary person, just flip through the news and move on. It is important to behave like an ordinary man which not too versed in the economy. Thus, we make fundamental analysis.
But this algorithm is my single opinion, which may not coincide with yours. In practice, it works for my trade.

The main mistake of fundamental analysts is that they do not taking to consideration other traders. They do not take into account the technical analysis which shows us actions of other traders and situations that occur on the chart.
If the actual statistics better than expected, then it is good for the currency. If this value is less than the forecast, then it's bad.
However, remember that price is not obliged to follow it. If the presence of a strong downward trend, it is unlikely that the good news will be able to easily change the situation on the chart. The price may continue to decline further, because it is easier to do, because the bulk of the following big trend. We remember the fundamentals, but also includes technical analysis.
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