Fundamental Analysis – It is no secret that fundamental analysis is the basis for determining the price movement. Knowingly or not, the fundamentals are very concerned at the direction of the full price. Perhaps this is what makes traders to profit, so when we use technical course still overwhelmed in predicting market. Because it is very important, fundamental to be learned, and this article will discuss it to you. Let’s follow the reviews.
You must have heard there are some people who earn a living by trading in financial markets, and some even live only from trading. Trading in financial markets has become common for people who live in developed countries. Could be called has become their way of life. By taking the opportunity to earn money from the currency market, then you can add extra income or only source of income.
Fundamental analysis is a way to predict price movements by translating a variety of information on economic conditions, including news, reports and policies issued by the government or rumor.
In fundamental analysis, price movements that occur when there are drastic events are not unexpected. This event could be the increase / decrease in interest rates from the central bank, to political events or wars.
An example is the events of 9/11. When the events of 9/11 occurred, rate USD weakened because everyone expected the event will affect the U.S. so most likely USD weakened. This incident led many market participants to sell USD. Impact USD rate actually dropped dramatically.
Fundamental analysis takes a different approach. Is essentially a news or rumors circulating in the market. Financial Exchange as the stock and money markets are very sensitive to the news being released. So what happened to the forex trading market. It can even be said to be driving the exchange rate itself is actually news. In other words, market news is the driving emotion that resulted in changes in the balance point in the exchange rate.
Cut loss is the most serious decision because you have to realize losses. Effect of fundamental analysis very closely with the state cut loss transactions. What if do not like to cut loss when there is fundamental news?
You can imagine if the market crashes, price drops clumsy and you deal with the situation is still holding prices come landslide or want to take it off. Instinctively you can not bear to see the money runs away. But that quick decision that you should take so that losses can be minimized and agile open a new position at the time aware of any fundamental data releases.
Realistically you should be aware that the decision to cut loss also applies to pair big caps that have strong fundamental though. Although the pair is relatively big caps faster than small caps, it still can come back over time to original price position.
Excess fundamental analysis:
- Can determine the global price
- Determinants of long-term trend (long term)
- In certain cases, effective for short term trading
By doing the proper preparation and knowledge, your chances for maximum profit from financial markets can certainly happen.