When conducting fundamental analysis in the forex market: Keep an economic calendar on hand that lists the indicators and when they are due to be released. Also, keep an eye on the future; often markets will move in anticipation of a certain indicator or report due to be released at a later time.
When economic reports are released, traders and investors will look for signs of strengths or weaknesses in different economies. If prior to the news releases, the market sentiment leans in one direction, changing the price before the release is known as a 'priced in market'. It often causes a little commotion upon the actual data release.
Conversely, when the market is unsure - or the data results vary from what was anticipated - severe market volatility may occur. That is why Forex rookie traders are generally advised to stay away from trading around the news when practising fundamental analysis.
I appreciate your effort to explain fundamental analysis, but I dont think that it is easy task at all. Keep in mind that usually macroeconomic indicators are correlated to one another and move in one indicators can trigger completely different market reaction from expected one
Fundamental analysis seems very easy at first glance, but in practice it is not. At first, I thought that when good news came out about the US, then the dollar should go up. With bad news from Europe, the euro should fall accordingly. Everything seems very simple and logical, but unfortunately, things are not so simple in practice. You need to be familiar with a lot of information below the surface to be able to properly read the news. And that requires a lot of extra knowledge and reading.
The most important thing is that you can estimate what will happen to this asset in the near future with this news. Plus, you can earn on the impulse that comes with the strongest news. But here it is worth working either on the pre-market or quickly orientate and enter the market right after the publication. And in general, news and reports open up great prospects when you do not just navigate by levels and charts. Thanks to them, you begin to understand the market and at this stage your trading becomes more conscious and qualitative.
Fundamental analysis (FA) is a method of measuring the intrinsic value of a security by examining the economic and financial factors associated with it. Fundamental analysts are researching anything that can affect the value of the security, from macroeconomic factors such as the state of the economy and conditions of the industry to microeconomic factors such as the efficacy of the management of the company.
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