 | What is the definition of Fundamental Analysis?
This is a method of analyzing the financial markets using the economic indicators and political factors in order to determine the direction of a nation’s currency.
|  | TradersLaboratory decodes Fundamental Analysis
Fundamental analysis is the primary driver of the forex markets. This is because the figures released for the economic indicators will affect the investment climate and appetite of traders for the affected country’s currency. Millions of individual and institutional traders watch these economic indicators and when the figures are released, they produce an immediate market bias for the affected nation’s currency. This bias can be positive, (sending the currency value upwards) or negative, crashing the value of the currency. Traders usually develop a bias because fundamental analysis answers the following questions:- is the economy of the country in question expanding or contracting?
- What parts will the country’s policy makers be looking at, and what actions will they possibly take?
- What parts of the economy is doing well or in bad shape?
These questions help traders determine if that country’s currency is worth holding, and they respond accordingly after conducting the fundamental analysis. |
|
|
Linear Mode
