Forex fundamentals and Forex news are essentially economic variables that can be thought of as catalysts for price movement in the Forex markets. The school of thought known as “Forex fundamental analysis” essentially says that a trader can predict future price movement of a market based on a market’s fundamentals or news data. Whilst it seems perfectly logical to assume you can study the economic fundamentals and news of a market and make predictions about it’s future direction based on this data, it’s not quite that simple.
Have you heard the old saying “Buy the rumor, sell the fact”? There’s a reason this saying has been around on Wall Street for hundreds of years, it’s because when market data comes out, it typically has already been factored into the market and it’s impact will thus be minimal once it finally is released. Traders and investors tend to operate on expectations of what might happen in the future, based on some news data or fundamental analysis, that’s where the ‘buy the rumor’ part comes in at. The tricky aspect of this is that we can never know for sure exactly how much of any piece of impending economic news has already been acted upon / factored into the mark…
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