Forex Strategy Trading Hints: How to Employ Forex News to Trade the Foreign Exchange Market

Fundamental analysis is the investigation of how the global events and news have an effect on the currency markets.

In this edition of my Forex strategy trading Hints I will be teaching you how I you can implement fundamental indicators to help you take better trading judgements.

The use of fundamental analysis in the FX market is done by using economic indicators. These fundamental indicators provide you with economical factors of a country that can assist you to assess the strength of a country’s currency.

Economic indicators are available through numerous bodies of a country’s government and large companies. This information is examined by FX traders to predict the direction of the Forex markets. Currency economic indicators are offered at defined times and dates, and are followed by most succesful FX traders.

Since so many investors are looking at them, Forex economic indicators have a massive impact on the exchange rates of the currencies that are traded in the Forex market.

The vast majority of foreign exchange market do not use fundamental analysis because economic indicators seem challenging to them.  

Nonetheless, using fundamental analysis and following economic indicators can be a whole lot easier when you follow very simple guides that will keep you up to date with the Forex economic indicators with no trouble.


How to Start Using Forex Economic Indicators

It is important to keep a log of all the important Forex economic indicators’ release dates. Keep a log or subscribe to one of the economic journal services that are available via the internet.

Additionally, you should employ and follow economic indicators that are related to the currencies you trade. Each currency belongs to a different country and subsequently the economic indicators will be different for each currency.

You will additionally need to learn what each indicator means and how it will influence a currency’s strength.

The main principle behind Forex fundamental analysis is that if a country’s economy is doing well its currency will go up in value and if the economy is doing bad then their currency will devalue and its price will move down.


The Most Significant Fundamental Forex Indicators

As I mentioned before each currency will have distinct economic indicators and the date and time when they are published are different. It is now time to talk about the most widely used fundamental indicators that every single FX trader should pay attention to.

The Treasury International Capital: The treasury international capital or TIC records the flow of treasury and agency securities. The basic principle behind this indicator is that a higher than average reading is positive (or bullish) for the USD, while a low reading is negative (or bearish).

Durable goods: This is released monthly by the Bureau of Census and reflects new orders placed with domestic manufacturers for delivery in a near future.  The basic principle behind this indicator is that a higher than average reading is positive (or bullish) for the USD, while a low reading is negative or bearish.

Consumer Price Index (CPI) Ex Food & Energy: This indicator measures and analysis the weighted average of prices of consumer goods and services such as transportation, food, and medical care. This indicator is used to measure the level of inflation of a country. The basic principle behind this indicator is that a high reading is seen as positive (or bullish) for the USD, while a a lower reading is seen as negative (or Bearish).

There are many other Economic indicators that can be used to assess the FX Market and you should spend some time examining the ones that impact the currency pairs you trade. I hope I was able to offer you with beneficial information in this segment of my Forex strategy trading tips and hints.

Sincerely,
Jay Molina
Pro foreign exchange trader & trainer

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About the author

Jay Molina is an advanced Forex trader that helps other investors around the world to learn about the Forex market and its rewards and risks. To understand more about forex strategy trading, visit the link: http://www.myfxinvestment.com

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