Forex Analysis Report
forex analysis report
Fundamental Forex Analysis Explained in Plain English
If you’ve been trading for a while, no doubt you know that as a smart trader, you have to be able to analyze the market and predict price movements. This is true whether you trade in commodities, stocks, bonds, currency or any other type of security.
You can do analysis in two different ways. You can utilize fundamental analysis and technical analysis.
Technical analysis studies prices. Here, you want to analyze price movement history so that you can try to predict future prices.
Fundamental analysis studies a nation’s overall economic health. This can otherwise be termed as “big picture” analysis. You focus on the strength of a nation’s economy and how it will affect the supply and demand of its currency. This, in turn, will affect the currency’s price.
As an example, let’s say that the US economy is in a major positive trend. The economy is strong, so the dollar is expected to rise, and currency traders will invest great amounts in the dollar. This can be a self-fulfilling prophecy, so that the dollar increases in value.
As a concept, that’s pretty simple, but it’s not so easy to judge the health of the nation’s economy. In fact, you need to consider many things. Two traders may look at the same figures and come up with entirely different interpretations of the data.
Those who focus on fundamental analysis look at a variety of economic indicators to determine how strong a particular economy is. Some of the indicators they may analyze include the unemployment rate, the interest rate, gross domestic product, and the Consumer Price Index.
Various government agencies regularly release reports on these factors, as do non-government agencies. Find the latest schedule of upcoming releases and make note of them. Keep an eye on them for a few months to see what effect if any they have on currency prices.
One thing you should keep in mind is that it’s often not the numbers in a report that carry the greatest impact, but the relation of the numbers to what was forecasted.
Put another way, if interest rates rise, this may not have a significant impact if forecasters were indeed expecting it. However, if they weren’t expecting it, and they expected interest rates to remain steady or fall, an unexpected increase may have a significant impact on currency prices.
Fundamental analysis does have a disadvantage in that it can be a little too general, a little too “big picture.” It’s wonderful to predict overall economic growth and price changes that result, but you can’t usually get enough detail from it to target specific exit and entry points. This is why technical analysis is just as important, so that it can help to further refine an estimate based on a “big picture” prediction with fundamental analysis.
In conclusion, successful forex traders usually develop a trading system that’s based on a mix of fundamental and technical “triggers” to instigate trading orders. Some, however, have been successful with using as few indicating sources as possible to determine trades – such as price-driven variables on a certain currency pair.
About the Author
Ian Armstrong is an avid Forex enthusiast.
He suggests taking a close look at Avi Frister’s “Forex Trading Machine” for the simplest approach to predicting profitable trades, at Forex Trading Machine
The Vulcan Report (61) – FOREX (pt 1) Death of the Dollar.mp4
|
|
Sentiment in the Forex Market: Indicators and Strategies To Profit from Crowd Behavior and Market Extremes (Wiley Trading) $39.79 Crowds move markets and at major market turning points, the crowds are almost always wrong. When crowd sentiment is overwhelmingly positive or overwhelmingly negative ? it’s a signal that the trend is exhausted and the market is ready to move powerfully in the opposite direction. Sentiment has long been a tool used by equity, futures, and options traders. In Sentiment in the Forex Market, FXCM ana… |
|
|
How to Make a Living Trading Foreign Exchange: A Guaranteed Income for Life (Wiley Trading) $42.27 Solid Forex strategies for capturing profits in today’s volatile marketsHow to Make a Living Trading Foreign Exchange puts the world of Forex at your fingertips. Author Courtney Smith begins with an introduction to the Forex market-what it is and how it works. He then delves into six moneymaking techniques for trading Forex, including his unique Rejection Rule that doubles the profit of basic chan… |
|
|
Plotting platinum: Priscilla Ross reports on the latest changes in the platinum group metals market, always a major forex earner in Southern … African Review of Business and Technology $5.95 This digital document is an article from African Review of Business and Technology, published by Thomson Gale on July 1, 2005. The length of the article is 1154 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation De… |
