While the ‘technical analysis is essential to making Forex trading, particularly for the identification of points of entry and exit of those, is insufficient if you wanted to create a complete trading plan. The feeling of the forex market is mainly driven by economic and geopolitical news of the day. The main players in the currency market are multinational corporations, central banks, hedge funds that invest several billion dollars and major investment banks.
All these actors are preparing for their trades by analyzing the news of the latest economic and geopolitical developments, as well as the latest statements by the G-7 and the various monetary authorities. Therefore, the correct approach to forex trading can be summarized basically that of working, but technically entering and leaving.
The beliefs that people want to do trading in order to use the basic data should choose a longer period of time, for days or even weekly. Traders who want to do instead of short-term trading, using the hourly charts, for example, should instead focus on configuration and the decisions on strictly technical. This way of thinking is actually wrong. Not only can you make scalping using fundamental analysis, but who does it actually has a significant advantage over the larger market players when it comes to easy guide their positions.
One aspect of the foreign exchange market is that transactions outside the influence of macroeconomic news may be more risky than those without considering the ‘fundamental analysis, as in this case we have a general idea of how it could move the market. The various economic data, such as the latest employment statistics, the growth rates of GDP, the trade balance reports, inflation readings and announcements of interest rates, which are typically released every month and that can be expected in the various economic calendars are of great importance for those who do trading.