Forex Trading Fundamental Analysis

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Forex Trading Fundamental Analysis

Fundamental Analysis Forex Trading is a method or method that we can use as a basis when running forex trading transactions. And the basis here is when is the right time to enter the forex market and when is the right time to get out of the forex market. Conducting a fundamental analysis means that we analyze the economic conditions of a country on a macroeconomic basis and the purpose of fundamental analysis is to find out exactly how intrinsic the value of a trading instrument is, in this case: currency, to the current economic conditions of the country. By doing fundamental analysis, we will know how much the real value of the trading instrument is and the name of the trading instrument that is traded on the forex market will always tend to move towards its real value or intrinsic value .
So in essence the name is forex fundamental analysis is a way that can be done by every forex trader to make an assessment of a currency based on macroeconomic conditions, and government policies / some socio-political factors in the business cycle framework. And to do the fundamental forex analysis, a forex trader can do it by measuring the economic condition of the country based on several economic indicators as below,
  1. Announcement of Interest Rates
  2. Gross Domestic Product (GDP)
  3. Consumer Price Index (Inflation) and Expenditure Indicator
  4. Employment Indicators
  5. Retail Trade and Consumer Confidence
  6. Surplus or trade balance deficit
  7. Government Fiscal and Monetary Policy
And the economic indicators above are periodically announced by the governments of each country to the wider community. And we as forex traders can monitor the announcement schedule and the results through the Forex Calendar that has been provided by each of our forex brokers but if your forex broker doesn’t provide it then you don’t need to be discouraged because we also provide it for free. And we need to realize together that when the results of this economic indicator calculation are announced, it will directly affect currency price movements so that we as forex traders should never miss the news.

Advantages of Forex Fundamental Analysis When Running Forex Trading

  1. By doing fundamental analysis, we will know the data from the intrinsic value of a trading or investment instrument, especially in this case is a currency. And the data in the form of this value can be used to decide when the time is to enter and exit the market.
  2. By knowing the data of economic indicators, we will be able to identify several investment opportunities that exist within a country that can be run either in the short or long term.
  3. By knowing the values ​​of economic indicators, we will also become aware of the health conditions of the state finances in real terms, whether the country’s financial condition is in a strong condition or vice versa, so that we as forex traders can project how the economic growth projection is in the future.
In addition to the forex calendar provided by forex brokers, we can also get information about economic indicators and forecast data from several analysts through several sites such as forexfactory.com, actionforex.com, and forexnews.com so that we as traders Forex has no reason to find it difficult to get / learn the forex fundamental analysis.

But also keep in mind that even though we have been able to master forex fundamental analysis it does not mean we can get a guarantee to always benefit when running this business because forex fundamental analysis still has a weakness that we need to understand. The weakness of the forex fundamental analysis that is meant is that the data we use as an analysis calculation is past data and some of our own assumptions about the data. So if in the future there is a change in government plans, natural disasters, or a market bubble that all of these factors cannot be predicted, then we as forex traders may get losses.

But we as forex traders need not worry because even though we already know that the name of forex fundamental analysis still has weaknesses because of using past data but at least we can still try to cover up these weaknesses by doing technical analysis, huh! although technical analysis also uses past data, as comparative data when making decisions and we can apply the name risk management .

Although the name of forex fundamental analysis still has weaknesses does not mean that weakness makes us not use it. Why ? because the name of certainty in any business is uncertainty itself!

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