Hello to my wonderful Serey family, I hope you are doing well, good and splendid
Today, I will be continuing from where I previously stopped in my FOREX
and other financial tools lecture here on SEREY which will be about FUNDAMENTAL ANALYSIS. If you don't know about Technical analysis, you can check out my previous post on it in my blogs
Now, let's Serey on
Fundamental analysis is a way of approaching and assessing the market by taking a look at the economic data report of a particular country, social and political forces that may affect the prices of a particular currency, non-farm payroll news and even random tweets and decisions from some certain world leaders and financial expert analysts which is likely to have impact on the value of such a currency
Fundamental analyst traders are also known as News traders because they trade based on information and trending news in the financial market.
Fundamental analysis is a way of looking at the forex market by analyzing
economic, social, and political forces that may affect currency prices.
If you think about it, this makes a whole lot of sense! Just like in your
Economics 101 class, it is supply and demand that determines price, or in
our case, the currency exchange rate.
Using supply and demand as an indicator of where price could be headed is easy. The hard part is analyzing all of the factors that affect supply and demand.
In other words, you have to look at different factors to determine whose economy is rockin’ like a BLACKPINK song, and whose economy sucks.
Source
An example is the Non Farm Payroll news traded on the first Friday of every month by some traders
For a trader to be a good fundamental analyst, he or she has to understand the reasons why and how certain events and occurrences such as increase in unemployment rate and interest rate fluctuations affect a country's economy and the monetary policy solution provided to solve it which will eventually affects the level of demand and supply for its currency.
The idea and objective behind this type of analysis is that if a country's current or future economic outlook is good and promising, its currency would rate high and become strong among its counterparts
Another advantage is that the better outlook and shape a country's economy is the more the corporate organizations, businesses, and foreign investors will like to invest in such a country and that will result in the need to purchase that country's currency so as to get what the foreign businesses and investors have produce in such a country.
In the long run, it will help that country to increase its exporting power to other countries which will bring in huge revenue and return to such a country all these from foreign investment alone
All these decisions and policies help most countries in the Europe and the US to have a strong and buoyant economy in their countries with very little economic negative impacts
US dollars is one of the strongest currency in the financial market and that is what makes dollar denominated financial asset more attractive and sought after by most traders
In order to get the assets which are backed by Us dollars, traders and investors have to buy some Us dollars first and this will eventually increase the demand for it
As a result this decision by the investors or buyers the value of the Us dollars will have greater chances of increasing against other currencies with lesser demands
For you to have information about financial market you can check the Mt4 app, ask from seasoned traders or check out some good apps on play store for android users such as My Fx Book which is the one most traders are using.
(Screenshot taken with my IP12 Device)
Combining both Fundamental and Technical analysis in assessing a market structure allows a trader to have more clue about what is going on and be profitable that a trader who sticks to only one of the two in making its trading decisions
The coming post will be about Sentimental Analysis
Thanks for going through my post
Trade wisely and Happy Serey
This post was cross-posted from my Blurt account via this LINK
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Nice post