Fundamental Analysis


The best approach for forex traders is to do a thorough trend analysis of the entire market, or in the case of Forexearlywarning traders this would be to conduct a multiple time frame analysis for 28 pairs, by individual currency.

So fallen beispielsweise die Spreads geringer aus und die Kunden erhalten bessere Leistungen wie einen persönlichen Account Manager oder umfangreichere Analysen.


Fundamental analysis is a way of looking at the forex market by analyzing economic, social, and political forces that may affect the supply and demand of an asset. If you think about it, this makes a whole lot of sense! Just like in your Economics class, it is supply and demand that determines.

A trading strategy can offer benefits such as consistency of positive outcomes, and error minimization. Technical analysts track historical prices, and traded volumes in an attempt to identify market trends.

They rely on graphs and charts to plot this information and identify repeating patterns as a means to signal future buy and sell opportunities. Introduction to Trading Analysis.

Leveraged trading involves high risk since losses can exceed the original investment. A capital management plan is vital to the success and survival of traders with all levels of experience.

Learn risk management concepts to preserve your capital and minimize your risk exposure. Seek to understand how leveraged trading can generate larger profits or larger losses and how multiple open trades can increase your risk of an automatic margin closeout. Introduction to Capital Management. Execution speed numbers are based on the median round trip latency measurements from receipt to response for all Market Order and Trade Close requests executed between August 1st and November 30th on the OANDA V20 execution platform, excepting MT4 initiated orders.

For more information refer to our regulatory and financial compliance section. OANDA uses cookies to make our websites easy to use and customized to our visitors. Cookies cannot be used to identify you personally. To block, delete or manage cookies, please visit aboutcookies. Restricting cookies will prevent you benefiting from some of the functionality of our website. Open a demo account to fine tune your trade strategies Try a demo account. Boom-bust cycles are very powerful, high-level events that force everything else to move in tandem with them.

Once I identify the phase of the boom-bust cycle, how can I profit from news releases? This picture can help you understand what goes on in the economy. By understanding the big picture, you can identify who is benefiting from it most, and then, as you place your trades in harmony with those who drive the main trends, you may turn great profits.

There are two kinds of actors in any market: In some situations, where lending standards are lax and money flows in abundance, speculators can easily overcome those who are involved in genuine economic activity, and become the main drivers of the price trends.

You can simply follow the currency trends. If I use fundamental analysis simply to follow the trend, why not just follow the trend, while forgetting about fundamental analysis altogether?

Because you will only follow the trend as long as the fundamental factors tolerate it. Through fundamental analysis, you will be able to avoid jumping on the train of speculation at the height of euphoria, and will be able to reverse your direction quickly when fundamental factors tell you that the benign economic environment has changed. Remember, fundamental analysis studies the causes of economic events. Of course, even without detailed fundamental reasons, one can simply avoid a bubble once its price trajectory takes the form of a parabola.

Then you must consider whether there are any new technological innovations, financial products, emerging nations, and so on, that can create the fuel for a period of healthy economic growth on a global scale. Then you must consider the political climate.

Is there a lot of political instability in those nations that drive global growth? Let me help you with a chart:. This is the first stage of fundamental analysis. Here you decide on the dynamism of the global economy. The health of the global economy can have a lot of bearing on such seemingly unrelated things as forex market volatility, carry trades, cross-border capital flows, and so on.

It is also crucial when deciding whether one must be conservative or relatively optimistic in assessing high-frequency economic data such as durable goods orders, weekly jobless claims, etc.

So I should analyze the global economy at the highest level to decide on my forex strategy. Now, how will I decide on which currency I should buy and which I should sell? In deciding which currency to long or short, you will need to examine the fundamental health of the economy by considering the indicators which we will discuss shortly. Of course you can. Fundamental analysis is always right. The imbalances and abnormalities defined by it will always be corrected by policy action or market developments.

But it may not always be possible to guess how that correction will occur. Do not participate in parabolic price action, unless you have exceptionally good reasons for doing so.

Anything can create a bubble, regardless of how convincing the rationalizations and the proposed causes are. Also remember that our descriptions are valid for a highly integrated, trade-intense, non-protectionist global economy.