Fundamental analysis is often ignored in the Forex market. The new traders rely too much on the technical data and they forget to analyze the fundamental details of the market. At times you might be able to find some good trades based on the technical data but when it comes to fulltime professional, you must learn to assess the high impact news. Major news data is often considered to be the most powerful price driving catalyst in the Forex market. In fact, it holds the potential to change the long term market trend. Even after mastering the details of technical analysis, you are bound to lose money. Let’s learn some of the key reasons for which we need to learn fundamental analysis.
Changes in major trend
Do you know why the long term market trend often gets changed? This is the impact of the major news release. Let’s consider the USDSGD pair. For any reason, if the FED officials hike their interest rate, you will see a significant boost in the U.S dollar index. This will eventually push the Singaporean dollar lower against the mighty green bucks. Learn more about the interest rate changes, unemployment data, and FOMC meeting minutes to protect your trading capital in the long run. Once you learn the proper way to assess these major news, you can easily find the trend reversal based on technical data.
Riding the long term trend
If you want to ride the long term market trend, you must learn to analyze the news factors. Try to execute the trade based on technical and fundamental data. Being a new trader make sure you have access to the premium online trading account or else you might have to face freezing platform issue. Once you start to understand the major news release, you can easily use the Fibonacci retracement tools and ride the market trend. Though the trading technique is extremely effective, make sure you never risk more than any amount you can afford to lose.
Dealing with the false spike
The intermediate trader often complains this market is rigged. If this was true, the large banks and institutions would have made billions of dollar profit. The new traders are losing money since they don’t know the proper way to assess the false spike of the market. If you intend to find good trades, make sure you are relying on the major news releases Most of the time a false spike occurs in the event of high impact news. So, if you prepare yourself for such an event, you won’t have to lose money on a false spike.
Trading the major chart patterns
Chart pattern trading is one of the easiest ways to catch a large market movement. But do you think you can easily make a huge profit by trading the major chart pattern? You have to learn the proper method of fundamental analysis since it will help you to make a better decision in real-life trading. Think about simple technique in trading. Try to blend the technical chart pattern data with the fundamental factors of the market. Once you learn this process, you can easily find high-quality trades.
Learning to trade the news
Becoming a professional new trader is a very challenging task. But if you can truly master this skill, you can easily make a huge profit from this market. The more you will learn about the fundamental factors of the market, the better you will become at trading. You can easily deal with the volatile market and execute a trade with an extreme level of confidence. Being a rookie trader, you should use the demo account to learn the art of news trading. Once you feel confident in your demo trading performance, start to trade the market with managed risk. Be very precise with your action since a small mistake can cost you a fortune.