Introduction To Forex fundamental analysis are briefly discussed and you can read it and get vast knowledge about Forex fundamental by referring it.
This one introduction to fundamental analysis. Now, by the end of the section you will understand what to focus on when trading fundamental analysis, you will understand the importance of fundamental announcements and how they can make you money. You will learn about some of the various news sources in Forex, you will learn the main tools used by central banks to maintain economic stability and you will also learn the main types of economic indicators. Now, every country has a central bank that manages the monetary policy of that country. So, England as the Bank of England, USA the Federal Reserve, Japan of the Bank of Japan, every major country has a central bank that manages the monetary policy of that country and the function of the central bank is to maintain economic stability.
Understanding Fundamental Analysis
- Every country has a central bank that manages the monetary policy of that country.
- The function of the central bank is to maintain economic stability
- The central bank does this by monitoring various economic indicators to get an idea how the country is performing
- The central bank then based on the state of the economy implements various changes in monetary policy such as raising interest rates
Now, the central bank does this by monitoring various economic indicators to get an idea of how the country is performing. The central bank then based on the state of the economy, implements various changes in monetary policy, such as raising or lowering interest rates. So, therefore we have to focus on these economic indicators because the central banks are focusing on these economic indicators to give them insight as to the state of the current economy.
We need to always know what the central banks are thinking. Okay, we need to know what the central banks are thinking to raise interest rate or lower interest rates. So, we need to focus on the news central banks are focused on now every month there are several fundamental announcements, fundamental announcements. And economic indicators are the same thing. Fundamental announcements, economic indicators, news report. These are just different names used to use to identify the same thing, which is economic news. Okay, so, fundamental announcements, news reports, economic indicators. These are all the same thing. most fundamental announcements are released each month you have some fundamental announcements, like for example, GDP that is released every three months.
- Every month there are several fundamental announcements, news reports (economic indicators) released each month, these are also called risk events.
- Some have a huge impact on the market and cause major movements in prices while others have small effect on the market and will not affect much price movement.
Most of the fundamental announcements are released every month. Okay, no, some fundamental announcements have a huge impact on the market and can cause major movements in prices, while others have a small effect on the market and will not affect price movement as much now. For example, the non-farm payrolls Fundamental moments meant as a huge impact on the market. And this announcement usually causes the market to move anywhere from 100 to 200 pips. And this can occur in a matter of minutes, the market can move on to pips in 15 minutes whenever a non-farm payrolls result is released.
So, this is a very volatile news report and non-farm payrolls is a very volatile news report, and a lot of fundamental traders pay keen attention to the non-farm payrolls. It is released the first Friday of every month. Now the CPI for example, does not have the same volatility that the non-farm payrolls says the CPI may cause the market to move anywhere from 60 to 100 pips, you still can make a lot of money from that, but it’s not as volatile as the non-farm payrolls relief.
So, depending on the type of fundamental announcements, you may have huge price movement or small price movement. Now this chart shows a list of countries and the time of which fundamental announcements for these countries are released. Now most of the US fundamental announcements are released between 830 Eastern and 10 o’clock eastern time. Okay, so that’s for the US most of us fundamental announcements are released during this time period. UK fundamental announcements are mostly released between two o’clock eastern and 430. eastern Australia fundamental announcements are mostly released between 730 Eastern 1930 Eastern so if you plan on trading fundamental nonsense, you need to be aware of the times at which these fundamental announcements will be released and ensure that you’re trading during these times. In the next lecture, we be looking at the major economic indicators
Next Article After Introduction To fundamental analysis