Excerpt: Fundamental analysis can be time consuming and a daunting task to do. Forex4you has compiled the best Fundamental analysis tools for you to make the best out of your analysis in an efficient manner.
Forex traders are in the market to make educated trading decisions and reduce the risk of losing as much as they can. Therefore, a Forex trader has a great number of analysis tools available for its arsenal. Some traders focus only on technical analysis, where others only focus on fundamental analysis. There is no best practice, but the better traders do combine both to get more insights about the market. So even a more experienced trader begins preparation by spending ample time analyzing the foreign currency pair charts and studying the numerous economic reports, which are the main drivers of the market. Thus it would be very time consuming to go through all of the news and economic indicators like employment rates, inflation reports, interest rates and other data. Therefore, fundamental analysts usually have an approach to digest this data and use fundamental analysis tools to determine trading opportunities. So where to begin? Below, Forex4you team has listed the best Forex fundamental analysis tools that are available to any Forex trader.
1. Economic Reports
Around the globe, different countries regularly publish economic news tracking areas such as their gross domestic product (GDP), unemployment rates, Nonfarm Payrolls (NFP), retail sales and inflation. An example of the US GDP chart can be seen below.
These are some of the important economic indicators provides fresh information on how an economy is performing and strongly affect market prices. All of these economic reports can be found on the governmental website of each country.
2. Economic Calendar
One of the most used fundamental analysis tool is the Economic Calendar, which encompasses pre-scheduled financial events, which affect the Forex market. They include the monthly unemployment report of a country, statements made by countries and other major players in the financial arena such as central banks, the International Monetary Fund (IMF) and other. The economic calendar also accumulates all the important economic indicators (GDP, CPI, PMI, Trade Balance, etc…). Therefore, almost all Forex traders use the economic calendar in their daily trading routine, since it is time saving and efficient.
At Forex4you, you get free access to the Economic Calendar. As shown above, each event listed has a volatility indicator that shows the impact of each news item or economic report on the Forex market.
3. Forex News Portals
Apart from economic reports, other key fundamental analysis tools are basically news, since they are catalysts for short-term volatility movements in the Forex market. These economic news are available trough various channels; TV, online news portals, radio, podcasts, newspapers, etc. Also, the economic news comes from various countries, but the biggest driver and most watched news come from the United States, since the U.S. dollar is the world’s reserve currency. Having so many channels and large abundance of daily news, it is impossible to stay up to date with everything and also translate this into actual impact on a currency. So how do traders keep track? Traders at Forex4you can get incoming economic news directly in their trading terminal, so it is possible to immediately digest this news and make trades on it. Also, on Forex4you, traders have access to direct market commentary of Trading Central, a leading investment research provider of technical strategies.
There is also the possibility to watch Trading Central’s online broadcasts with direct market commentary directly through Forex4you. In this way, you will have professionals explaining directly, how each particular news item can impact the currencies.
4. Propriety Fundamental analysis tools & solutions
A number of other companies have offered in the market their solutions for scoring/rating the impact of economic indicators or news items on a specific trading pair. Often these solutions come at a price, but they are not popular among traders. Thus, the Economic Calendar, Economic reports, News portals and feeds, coupled with a sound trading strategy remain the best combination for Forex traders.