Friday, April 24, 2015

FOREX THEORY


Here’s an Economic Report, Now What? (Part 2)

If you’re too busy to go through a bajillion news reports and economic data, don’t fret. Our resident economic guru, Forex Gump, got yo back covered! Make sure you read up on his regular economic analysis on his Piponomics blog.

As we mentioned from the get-go, it’s all about pairing a strong currency with a weak one.

At this point, you’re probably still waiting for the answer to “Will I ever need to use fundamental analysis to become a successful forex trader?”

We totally understand that there are purists on both sides.

Technical analysis seems to be the preferred methodology of short-term forex traders, with price action as their main focus.

Intermediate or medium traders and some long-term traders like to focus on fundamental analysis too because it helps with currency valuation.

Forex Technical Analysis vs. Fundamental Analysis

We like to be a little crazy by saying you should use BOTH!

Technically-focused strategies are blown to bits when a key fundamental event occurs. In the same respect, pure fundamental traders miss out on the short term opportunities that pattern formations and technical levels bring.

A mix of technical and fundamental analysis covers all angles. You’re aware of the scheduled economic releases and events, but you can also identify and use the various technical tools and patterns that market players focus on.

I have a couple of trade examples for you showing how the perfect blend of fundamental and technical analysis results in huge profits. Check out Cyclopip’s huge win on EUR/JPY and Happy Pip’s 115-pip profit on NZD/USD.

There’s your answer!

Happy?!

In this lesson, we’ll discuss the major fundamental factors that affect currencies. These are interest rates, monetary policies, and market-moving economic reports.

As I mentioned earlier, Pip Diddy’s daily economic roundup is a great source of economic updates. Combine that with Forex Gump’s in depth Piponomics articles and fundamental analysis will be a breeze!


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