Fundamental analysis in Forex is a type of market analysis which involves studying of the economic situation of countries to trade currencies more effectively. It gives information on forex Calendar the big political and economical events influence currency market. Figures and statements given in speeches by important politicians and economists are known among the traders as economical announcements that have great impact on currency market moves.
But when news are due, traders have to check the actual data. If to look at oil prices, a rising price will result in weakening of currencies for countries which depend on huge oil import, e. Whose speeches to keep an eye on? Chairman of the Federal Reserve Bank of USA, Secretary of the Treasury, President of the Federal Reserve Bank of San Francisco and so on. Traditionally, if a country raises its interest rates, its currency will strengthen because investors will shift their assets to that country to gain higher returns. Decreases in the payroll employment are considered as signs of a weak economic activity that could eventually lead to lower interest rates, which has negative impact on the currency.
A country that has a significant Trade Balance deficit will generally have a weak currency as there will be continuous commercial sellings of its currency. GDP is reported quarterly and is followed very closely as it is a primary indicator of the strength of economic activity. A high GDP figure is usually followed by expectations of higher interest rates, which is mostly positive for the currency. When it comes to news trading Forex brokers, however, may not be supportive of traders intensions to trade during news announcements.
There has been practices reported when Forex brokers simply freeze platforms during news, so that no trades can be opened or closed. Forex trading is a high risk investment. All materials are published for educational purposes only. It is important to know the time of High impact data release if you trade affected currency pair. During actual news release market becomes volatile. The strength of the volatility depends on the “factor of surprise” brought in the news.
Factor of surprise” can be defined as a level of unexpectedness, where traders compare Forecast data to Actually released data. Medium impact economic data should also be kept in mind in case the factor of surprise turns to be high. Low impact data most of the time do not shift Forex market significantly. Column Previous in Forex Calendar — provides data from last release. Column Forecast indicates numbers that economists are predicting and expecting for the upcoming release today. Column Actual is updated only after the data is out. At the very second when data becomes available it is instantly compared against Forecast values, and depending on overall positiveness or negativeness of the news for the currency plus taking into consideration the factor of surprise, price dips or rises in a matter of seconds.
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Basic strategies use simple chart pattern recognition rules and one or two basic indicators. By learning to recognize and trade simple patterns, novice Forex traders will be able to make a much smoother transition to more advanced trading systems and methods. Attention all traders: trading strategies are posted for their educational purpose only. Trading rules may be subject to interpretation. Planned risk levels may be increased dramatically under extreme market conditions. We recommend testing your trading system on demo account before investing real money.