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 about
Fundamental analysis.
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 supporting that prices will move up but the fact that all of a sudden the price down dramatically without any reason whatever.
In the first few months I Learn forex trading this is often times I 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 turns these factors exist at named the psychology of the market or market sentiment or whatever his name but who called clearly influenced by news and rumors circulating in the market.
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 supporting that prices will move up but the fact that all of a sudden the price down dramatically without any reason whatever.
In the first few months I Learn forex trading this is often times I 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 turns these factors exist at named the 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 special section examines matters of this kind. 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 against the presented news to be able to find out where the price is about to move.
Keywords of this analysis is on 2 words IE demmand and supply. Essentially the market makers are human, too. By measuring the more those who do purchase action (demmand) or reverse action selling (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 fall due to the many outstanding items in the market. Two things this is what try known by fundamental analysis.
Well seeing as it is all done by the actors of the market then the mass psychology as it applies in the forex world. When the economic news appears for example that reported that the currency of a country will tend to weaken so fundamental analysis served to analyse the news will appear then if these news appear 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 occurs the action of the 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, above already explained that in fundamental analysis of the factors that most plays is 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 any other currency pair.
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. The rise in interest rates in a country usually followed a rise in temporary (however large) on its currency. Logically this can be caused because the banking sector also raise interest rates including the tribe's 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 concerned did not join the suit that interest rates there are psychology and trader's view remains that way. 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 himself) 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 the news of rising tribal 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 are not needed at all because of various factors. In this case it is indeed important to sort out the fundamental news is important and not important. It will we learn in the next discussion is entitled "fundamental news filter"
the following is an example of the display of fundamental news on forex trading Forex learning and usage.
Ok, above already explained that in fundamental analysis of the factors that most plays is 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 any other currency pair.
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. The rise in interest rates in a country usually followed a rise in temporary (however large) on its currency. Logically this can be caused because the banking sector also raise interest rates including the tribe's 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 concerned did not join the suit that interest rates there are psychology and trader's view remains that way. 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 himself) 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 the news of rising tribal 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 are not needed at all because of various factors. In this case it is indeed important to sort out the fundamental news is important and not important. It will we learn in the next discussion is entitled "fundamental news filter"
the following is an example of the 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: date Recorded how news will be issued. Example: for Retail Sales 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 important news and market close.
PM: this is the hour at the time of the news release. 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 your website is written 12 GMT that it is 19:00. For EST (or ET) add + 12 to be pm. Note also that forex knows no hours of rubber. If the scheduled news appeared hours 6.00 6.00 hours right then the news will get out. So Your clock so that proper calibration.
Country: name of the country that issued the fundamental news. Match the currency you tradingkan. To EUR, notice the news from Germany and France.
News: News Name issued.
Impact: well, in two known code learn Forex impact i.e. 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 gone through a day where the news is released then the results will be issued on this column. For example for Retail Sales of AUD since news was launched on May 8, then the figures on actual already exists that is 1.1%. This article was created on May 10, 7.
Forecast: Is forecast or prediction of analysts about how the numbers might go out on news. Forecast is used as a benchmark for news that will appear. The actual result is larger or smaller than the forecast presents to influence 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.
Well with the table above you now know what will happen and at how a news will be issued. Thus, we can decide that we will be trading at these hours or not. Suppose you want to trade at the moment the news came 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 news that can make active moves prices 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. Quite big 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 exists on the forecast. Let's take the example of brief, namely Retail Sales Retail Sales. AUD is an index that measures the level of sales in the retail sector. This positive effect conferring indicators rise against currency movements.
Well now, compare how the magnitude of the Retail Sales month yesterday with the forecast displayed. Say for instance a case this time forecast shows more 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 do action buy even before the news was issued. 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 action of the sell happen.
Then the actual value at the time it was announced, then there will be three possibilities that may occur:
1. The actual value is greater than the forecast: in the case of Retail Sales then this results in currency will strengthen even further because 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 would result in weakening currencies because it turns out that what didn't happen the market expected.
3. the actual Value under forecast and previous: of course the currency will weaken quickly because it turns out that the calculation of the forecast misses far by
fact. Well this is a State that occurs when you look at the news. O Yes, by the way there are some news that can 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 effect on currency movements. Conditions such as these can soon 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) and also report the payment of salaries outside the agricultural sector (Non Farm Payroll). Both these news could result in price moves quickly and also with a large spike. So, out of the news. At the next session we will learn the news anywhere is important and which are not. To meet the next processed entitled: filter news.
