What is Fundamental Analysis in Forex?

Understanding of Forex Fundamental Analysis

“What is Fundamental Analysis in Forex?” This is the topic that we are going to learn about in this article. As you know, this is a series of Articles. In our First article, “What is forex and the Hierarchy of the trading?” ( https://fxsam.com/blog/view/Technical/1 ) . And you can learn the following topics soon.

1. What is Forex and the Hierarchy of the Trading? ( https://fxsam.com/blog/view/Technical/1 )

2. Fundamental analysis

3. Technical Analysis

4. Money management

5. Fundamental analysis of compound interest

Fundamental Analysis

A foreign currency exchange fundamental analysis strategy consists of studying a country's economic factors to predict the future value of its currency. According to the facts, this includes but is not limited to, economic conditions, monetary policy, etc. 

Fundamental analysis focuses on the study of the economic, social, and political factors that determine supply and demand. Important indicators include interest rates, inflation, and unemployment. Political decisions are also important.

Why Fundamental Analysis is important for Traders?

Fundamental analysis can prevent investors from making hasty decisions that may not be profitable in the long run. This method also helps in identifying start-ups and start-ups that have the potential to grow and generate good returns over the long term. Also, learning about the fundamental analysis will help you to increase your psychological decision while you are trading.

Simply, fundamental analysis mainly depends on Economic events. However, these economic events affect the foreign exchange market, other businesses, and financials. So, having a piece of proper knowledge about these facts will keep you secure while you are trading.

FX SAM Economic Calendar

In our website ( https://fxsam.com ), we are providing you the most reliable economic calendar. You can use ( https://fxsam.com/economic-calendar ) real time news update such as Economical events, Geopolitical events, and etc. So, as we mentioned earlier, fundamental events will affect your psychology. We, ( https://fxsam.com ) provide you the best economic events forecast for you before each majority news.

Below are some of the most important fundamental analysis indicators and their definitions. For more information on these metrics and how they are used, please visit ( https://fxsam.com/economic-calendar )

FOMC Meetings

The Federal Open Market Committee (FOMC) is the division of the Federal Reserve Board responsible for monetary policy. The FOMC consists of a Board of Directors and the Governor of the Reserve Bank. The FOMC's job is to conduct open market operations, including buying and selling government securities, to influence the supply of available money. For example, the FOMC reduces the supply of money available in the market by selling government bonds in the market. This is also known as a “shortage” in the money supply. FOMC operations have a direct impact on interest rates.

Given the important role of the FOMC, traders pay close attention to her FOMC meetings and their statements. Normally, this event is planned to be conducted eight times a year. Also, if needed more than eight times, meetings will be conducted at the necessary times.

Producer Price Index - PPI

A set of indices that measure the average change over time in the selling prices received by producers of goods and services within a country. Producer Price Index or PPI measures price changes from the seller's perspective

Consumer Price Index - CPI

A measure of changes in the prices of consumer goods and services such as gasoline, groceries, and automobiles. Sometimes called "overall inflation."

Gross Domestic Product - GDP

The monetary value of all finished goods and services produced within a national border during a given period. However, GDP is usually calculated on an annual basis. This includes all private and public consumption, government spending, investment, and exports less imports that occur within a defined region.

When trading with fundamental analysis trading systems, it is important to pay attention to financial news. Financial news can be found on our website ( https://fxsam.com/economic-calendar)

Fundamental Analysis As you can see, this is very important, but it is also important to integrate other techniques into your trading strategy. If you would like to learn more about trading and basic to advance learning about Forex trading, such as technical analysis and money management, check out the other articles in this series.