FOREX THEORY
Here’s an Economic Report, Now
What? (Part 2)
If you’re too busy to go through a
bajillion news reports and economic data, don’t fret. Our resident economic
guru, Forex Gump, got yo back covered! Make sure you read up on his regular
economic analysis on his Piponomics blog.
As we mentioned from the get-go,
it’s all about pairing a strong currency with a weak one.
At this point, you’re probably
still waiting for the answer to “Will I ever need to use fundamental analysis
to become a successful forex trader?”
We totally understand that there
are purists on both sides.
Technical analysis seems to be the
preferred methodology of short-term forex traders, with price action as their
main focus.
Intermediate or medium traders and
some long-term traders like to focus on fundamental analysis too because it
helps with currency valuation.
Forex Technical Analysis vs.
Fundamental Analysis
We like to be a little crazy by
saying you should use BOTH!
Technically-focused strategies are
blown to bits when a key fundamental event occurs. In the same respect, pure
fundamental traders miss out on the short term opportunities that pattern
formations and technical levels bring.
A mix of technical and fundamental
analysis covers all angles. You’re aware of the scheduled economic releases and
events, but you can also identify and use the various technical tools and
patterns that market players focus on.
I have a couple of trade examples
for you showing how the perfect blend of fundamental and technical analysis
results in huge profits. Check out Cyclopip’s huge win on EUR/JPY and Happy
Pip’s 115-pip profit on NZD/USD.
There’s your answer!
Happy?!
In this lesson, we’ll discuss the
major fundamental factors that affect currencies. These are interest rates,
monetary policies, and market-moving economic reports.
As I mentioned earlier, Pip Diddy’s
daily economic roundup is a great source of economic updates. Combine that with
Forex Gump’s in depth Piponomics articles and fundamental analysis will be a
breeze!
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