How to conduct your fundamental analysis

There are three different analysis for Forex trading and it’s important to include each one of these different types to get a full view of where price might go next. These three types of analysis are: fundamental, technical, sentimental.

Fundamental analysis is perhaps the most neglected type of analysis and there are many new traders that will disregard it. However, it provides us with so many benefits and has such an influence on the markets. You will increase your chances of losing money if you don’t take it into consideration.

What Is Fundamental Analysis?

To put it as concise as possible, fundamental analysis is all about viewing the forex market from a political, social, and economic standpoint. Fundamental analysis refers to looking at the whole economy of a country and determining whether the country’s economy is getting better or worse. A better economy would equate to a stronger currency and a higher value so this plays a huge role in your trading.

Using an Economic Calendar

An economic calendar is one of the most useful tools you could use when you are performing your fundamental analysis. They are so useful because they will allow you to know when certain events are taking place–besides this, you’ll also find that many economic calendars will even state how much of an effect the event will have on the markets. For example, there are high-value events that have a huge impact on the markets such as retail sales, unemployment numbers, GDP, and many more.

if you are looking for an Economic calendar, you will find many of them online. When choosing your calendar you should make sure it is reliable and updated regularly. Getting the news as fast as possible is paramount for fundamental traders.

Traditional Sources for the Fundamental News

Besides using an economic calendar, you will also want to watch/listen to the traditional news sources that will offer a more mainstream perspective on the markets. There is a great number of them available for us to watch or listen to pretty much 24-hours a day! Some popular news sources include Marketwatch.com, Reuters, Bloomberg, and The Wall Street Journal.

The sources listed above are the big names in the industry and always stick to these–they will provide you with up-to-date coverage of all the most recent meetings and events that will impact the markets. Many people find it best to have the station playing in the background whilst they conduct the rest of their analysis, so this might be something to think about.

Using Real-Time Feeds

There are also many real-time feeds that exist, but they aim these towards the more experienced traders. They will probably charge you a monthly subscription fee, but you will enjoy getting all the news as soon as possible! Often when you receive the news from traditional news sources and economic calendars, you are being notified late and so you may miss countless opportunities.

Real-time feeds have many benefits – you can’t beat getting your news as soon as it comes out if you’re a fundamental trader – however, the monthly fee for most of these feeds will be an effective deterrent for beginner traders.

Interpret the Data and Develop Your Own System

Now that you understand how to conduct your own fundamental analysis, it would be wise to put together your own system you can prepare for times of need. It would be wrong to follow a pre-set way of doing analysis as this way won’t suit your own style and preferences.

Remember to take all three types of fundamental analysis into consideration:

Economic calendar–A free tool you can find around the web, make sure to only use a reliable one that is regularly updated.

Traditional news sources–Even though these can be great options, they are aimed more towards the beginner trader looking for someone to pick the trades out for him! They can be a good addition to a strategy, however.

Real-time Feeds–Using a real-time feed might seem as if you are pushing above your weight but this isn’t true. If you trade based on fundamentals, then you don’t want to compromise in this department.