Fundamental Analysis

This sunny day we will study another part of forex analytics. An art to predict currency movements by looking at the psychological market and news that may be affected. Well this time we will learn Fundamental Analysis mengenaik.

You ever try playing with pure technical analysis would certainly know that at certain hours and usually in the evening technical analysis often does not function properly. When all indicators are in favor that the prices will move up but the fact that all of a sudden the price down dramatically without any reason whatsoever.

In the first few months I Learn forex trading this is ever so often I've experienced. At certain hours it looks like prices are not following the laws of technical analysis and tend to move away in the absence of clarity. After studying for so long I finally understand that it turns out these factors exist at named psychology of the market or market sentiment or whatever his name but who called clearly influenced by news and rumors circulating in the market.

Fundamental analysis is the analysis of a special study of this kind of stuff. Basically the fundamental analysis combines news items in sectors of the economy, politics and security in a country and combine that with how the market reaction to the news was presented to be able to find out where the price is about to move.

Keywords of this analysis is on two words namely demmand and supply. Essentially the market makers are human, too. By measuring the more those who do purchase action (demmand) action or otherwise sell (supply) then we can know where prices will move. In a nutshell if demmand (Indonesian language this is a request. Still remember the school time in high school used to be?) increased while the supply remains so as the people in the motherland, the price will soon be creeping up. And vice versa when supply (offer) increased but then the price will keep demmand began to go down due to a lot of stuff floating around in the market. These two things are trying to be known by fundamental analysis.

Well since all of that is done by the market participants as well as the psychology of the masses, then it also applies in the forex world. When it comes to economic news such as that reported that the currency of a country will tend to weaken so fundamental analysis is responsible for analyzing news that will appear and then, if the news appears how it relates to the reaction of the market. Sometimes due to the market too often driven by emotion for a moment, without any economic news often happen action increase or decrease in the price of the currency. Usually this is due to shifts in supply due to demmand parties performing the action of certain purchases or sales in large numbers.

These Kinds Of Fundamental News

OK, had already explained that in fundamental analysis the most instrumental factor was named as news. Most fundamental news that play a role in determining the ups and downs of the currency rate is economic news. Information such as the unemployment rate, consumer confidence index and the manufacturer or other similar news determines whether a currency will be strengthened or weakened precisely against other currency pairs.

 

Most of the news that boils down to the ups and downs of inflation in a country. In a situation where inflation starts to rise then the direction is usually the central bank will raise interest rates. A rise in interest rates in a country are usually temporary increase will be followed (however large) on its currency. Logically this can be caused because the banking sector also raise interest rates including rates on savings and deposits. This has sparked a growing number of funds collected in the bank so that the money in circulation in the market will be reduced. Law suits demmand supply when the supply is reduced then the prices will also be increased. Even if the banks in the countries in question were not involved with adjusting interest rates there is a psychology of traders and remains so. As a result they also undertook action buy which will cause increased demmand. It is becoming a kind of self-prophecy (the fulfillment of what was convinced by itself) will be what market trust.

In forex trading, UPS and downs of interest rates is a final decision where previously initiated by the inflation data at the level of the consumer and the manufacturer. This news also will first affect the currency movements so that you should not consider only news an important increase in the tribe bungalah.

There are dozens of fundamental news which could affect the future market movements. There are important fundamental news to note there are also fundamental news that is not necessary at all due to various factors. In this regard it is important to sort out the fundamental news is important and not important. It will we learn in the subsequent discussion, entitled "fundamental news filter"

The following is a sample display of fundamental news on forex trading Forex learning and usage

 

The picture above is of fundamental news daily display of this website. Note at the top there is a header with the title Date, day, Hours, etc. The following caption:

Date: Record date for how news will be issued. Example: Retail Sales for AUD will be issued May 8, 2007.

Day: the day that news was issued. In one week, there is a 7 day yet for forex usually Saturday and Sunday passed because there is no significant news and market cap.

PM: this is the hour when the news was released. Note on learning Forex time format is in GMT. So if you live in Central Indonesia, add one hour. Some foreign forex website using a time format GMT or EST to GMT to EDT, add 7 hours. So if on the website it says 12 GMT that is 19: 00. For EST (or ET) add + 12 to be pm. Note also that forex knows no hours of rubber. If the news is scheduled to appear at 18.00 BST so precisely 18.00 GMT that the news will get out. So right so that your clock calibration.

Country: name of the country that issued the fundamental news. Match with a currency that You tradingkan. For EUR, notice the news from Germany and France.

News: News Name issued.

Impact: well, in two known code learn Forex impact that the medium and high volatility. The medium is marked with orange color as for the high marked in red. For news on low volatility is not noted by learning Forex because in our opinion there is no point.

 

Actual: If time has passed the day when the news was released then the results will be issued on this column. For example for the Retail Sales news was launched as the AUD on May 8, the figures on actual already exists that is 1.1%. This article was created on May 10, 07.

Forecast: Is forecast or prediction of analysts about how the numbers are probably out on the news. Forecast is used as a benchmark for news that will appear. The actual result is larger or smaller than the forecast also affects how the currency will move.

Previous: data for the news in the previous period. If the news appears once a month then the previous data on the previous month. It is useful also as patokkan against actual and forecast.

Details: If you don't understand what that Retail Sales of AUD or names of other fundamental news then you can click the image ... the light on this. It will take you on a page description of Retail Sales. Of course with the Indonesia language as an introduction. Nice isn't it?

 

Well with the table above you now know what will happen and at how a piece of news will be issued. Thus, we can decide that we will trade at this time or not. Suppose you want to trade when news comes out then you need to do is first of all of course see the news related to the currency that You tradingkan.

After that the next step is to identify whether the news is important or not important. The news was given a code orange (medium volatility expected) is the news that could make prices move off around 30 points when the news emerged. While news that coded red (high volatility expected) can make a currency move 50-150 points when the news was released. Pretty great isn't it?

After you determine the time and identify the news will appear then the next step is to look at the column and the previous forecast. The center of all of this is on the forecast. Let's take a quick example that Retail Sales Retail Sales. the AUD index that measures the level of sales in the retail sector. This positive arthritis indicators rise against currency movements.

Well now, compare how the amount of Retail Sales in the month yesterday with the forecast displayed. Say for example this case forecast indicates greater than prevoius then this data resulted in the news out before the currency could be strengthened gradually. This is due to the emergence of market sentiment that saw that the predictions better than previous data so that market participants buy action even before doing the news released. The same behavior also occurs if the forecast is smaller than the prevoiusnya. In a State so then the currency would tend to weaken due to the sell action occurs.

 

Then the actual value at the time it was announced, then there will be three possibilities that may occur:

1. actual Value greater than forecast: in the case of Retail Sales then this results in currency will strengthen even further due to the result it turned out much better than expected.

2. the actual Value of the forecast but still above the prevoius: in our case this time, this will lead to weakening currencies because it turns what is expected the market didn't happen.

3. the actual Value under forecast and previous: of course the currency will weaken quickly due to the calculation of the forecast turned out to be a fumble away with reality.

Well this is a State that occurs when you look at the news. O Yes, by the way there are some news that could be classed as news Super High Volatility. News like this can be in the form of economic news or security issues is taking place. In a State such as occurred in the United Kingdom bomb detonation hence it also affect the currency movements. In conditions like these can soon be lost investor confidence and lead to weakened currencies quickly. As for economic news that is news Super High classed as interest rate decisions (interest rate decission) salary payment report and also outside of the agricultural sector (Non Farm Payroll). Both of these news could result in price moves quickly and also with a large spike. So, get to know the news. At the next session we will learn the news anywhere is important and which are not. To meet the next school classrooms; titled: filter news.