How to Use Fundamental Analysis in Forex

Forex news is one of the main components of analysis, which can be used both to make money and to minimize/optimize risk. They are the publication of information of an economic, political or social nature. Some news can have a paramount influence on the quotations of currency pairs, stock and commodity markets assets, automatically triggering a chain reaction among correlated instruments.

How to earn with fundamental analysis

Fundamental analysis is trading on the news. The task of the trader is to estimate the importance of the potential news, predict the reaction of the majority and make similar bets. The main tool of the fundamental trader is the economic calendar. It is a list of the major world events that can fundamentally affect the quotes: monthly and weekly industry statistics, releases of central bank representatives, etc. Filters allow selecting news by a certain country (affecting a certain currency pair), news by importance, etc.

You can find economic calendars on many resources, but the main question is: where can you find news? The market reacts to most news within the first 30-120 minutes. The main sources of financial and economic news:

  • Original source. Online broadcasts of speeches of officials, official websites of statistical organizations, etc. Require knowledge of a foreign language and give only dry information without analytical output. 
  • News agencies. Reuters, Bloomberg. Do not relate to classical media, give concise information on all the news in the world with a slight lag. You can also add RSS feeds. 
  • Brokers. Brokers themselves are ready to supply their clients with the most actual news. They have outlets to primary sources, and their news feed can be quite current if you trust the broker. You can also find news in the platform itself. 
  • Analytical resources, blogs. Information is published here with a long delay and cannot be used directly for trading, but it will be good for analysis.

If you want to earn directly from news you have two options:

  1. Find a primary source. 
  2. Plot a candlestick chart in your platform and watch where and how fast the price moves. Open a position in the direction of the trend.

To understand how the news influence the market, we recommend you to get acquainted with the analytical reviews, where the market reaction is explained with arguments and technical analysis. You can also find useful information at here.