A week or so ago I wrote an article about why people should use fundamental analysis in their trading. If you haven’t seen it yet, go have a look here, it’s a bloody good read even if I say so myself :-). Today I’m going to look at another objection that you often hear people say when talking about fundamentals, and that’s that it is too difficult unless you have some kind of economics degree or work for Bloomberg!
Now I’m not saying that you can’t get complicated with fundamental analysis you can, absolutely. You have all of the different sites like Bloomberg , Reuters and a plethora of other sites. They often have some kind of political slant, especially the talking heads that they bring on. However, when you strip fundamentals down it can often be easier to understand than technicals, it’s all about knowing what to look for.
Researching fundamentals can be broken down into a step-by-step process like everything else, perhaps taking a few minutes each day and maybe a little bit longer at the weekend. It’s a lot easier than staring at a chart waiting for Price to hit a trendline or key level.
With technical trading you have to memorise all these weird patterns, engulfing bars, pin bars, tombstones, railway tracks, heads and shoulders, knees and toes! It can get really tough on the old memory. However if you know where to look then fundamentals is really easy to keep on top of. We all know about the Forex Factory Calendar but there are many other tools available to help.
ForexLive is another tool which is really good in terms of keeping you up-to-date and in tune with the market. It’s completely free and gives you access to common Terry and interpretation from some of the most well respected analysts in the industry. It’s also much faster then some of the mainstream websites such as Bloomberg where they will release articles some hours after a particular event. They also have some really nice specific sections, for example, news specifically relating to central banks and also a session wrap section which gives you a quick summary of what happened when a session ends.
My only criticism with the site is that it is very advertising heavy which can sometimes be distracting. However I would definitely recommend it for both its speed and being free.
Another website worth bookmarking is Central Bank News the reason I like this is that it not only gives you a summary of any monetary policy changes that any central bank may make but it also gives you access to the released statement. It’s a really good way of understanding how the central bank is feeling and you can look for clues as to what it might do in the future. There is a huge amount of information in this site, both news and general background, definitely have a hunt around.
By combining all of these tools you can start to get a feel for what’s happening in the markets, look for specific information on particular currencies, direction, what the central banks are thinking and what the analysts interpretations are. By using the sites you can have a good idea as to the strength or weakness of a currency and you didn’t have to buy an economics degree to do it!
If you would like to learn how to trade like a professional check out our 5* rated forex mentor program, RISK FREE; by clicking on the “Get Started Today” Button below
Why Use Fundamental Analysis