In this tutorial you will learn how to implement fundamental analysis in your trading style. This is what some people called institutional Forex trading system.
You should learn the basic macroeconomic factors that influence global market. This is called fundamental analysis.

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There is a great controversy between traders that use only technical analysis and traders that use only fundamental analysis. For me this is only academic. If there is information out there you should carefully watch it. Do not rely only in technicals or fundamentals. Use both. When you have a solid technical pattern that is supported by fundamentals then the chance that you are right is imminent. When technicals and fundamentals show in different directions then you should watch out. Do not be trigger happy with your Forex trading. Wait and see. Forex is not for prophets. You use scientific analysis in order to maximize the chance that you correctly recognize what the market has to give you. Examine thoroughly, have a solid technical pattern, know the fundamental support of your analysis and you have a nice trading decision. Seize your risk tolerance and you will be a winner.

Every nation has it’s central bank which is responsible for the well being of the economy. Central banks watch some economic factors that affect the economy and adjust their economic policy accordingly. These factors are announced regularly and the exact time of the declaration is known in advance. These factors are the fundamental indicators of the economy. The most important central banks are FED of USA, ECB of European Union, BOJ of Nihon and BOE of United Kingdom. There are many fundamental indicators but there are few of them that are called the “market movers”. They are called so because when they are announced they wage to the market the necessary steam to move. That happens because they have a great impact on economy and to traders’ positions also.

The most important thing you have to know about fundamental analysis is the market expectation of an indicator. Some analysts wage a probable number of the indicator to be announced. This has an impact to the market and traders are positioned accordingly. When the indicator is announced it affects the market only when it is much different that the market expected. That happens because each acquirable to the public information is already taken into account. When the new information is announced then it has impact on the market only if it is different than expected.

Build up your plan. Know in advance what important fundamental indicators are to be announced the following week. Learn the expected number if it is acquirable and try to forecast what will happen if it comes in superior of worse figure. This is difficult for the beginners but after studying it will be easy.

There are many fundamental indicators. US indicators have the greatest impact on market. European Union’s indicators have less impact unless they are much different than expected. Watch out for central banks head officers talking out and giving clues about inflation and interest rates. This day these are the two drivers of the economy. Words like vigilant or very vigilant about inflation from central bank’s heads have great impact on the currencies.

When the inflation is up central banks try to keep it low by leveraging interest rates. When interest rates are up then the currency is supported. Learn what economic indicators reflect the inflation and the decision of central bank about interest rates and you have an extra tool in your arsenal in order to trade.

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