Where is the data?

As technical analysis is generally classed as an easy gateway to the world of currency trading, fundamental analysis is often overlooked, given less of an importance by technicians. Understanding the impact of news events (Fundamental Analysis), how they affect the market is essential to becoming a successful Forex trader. It is important to understand before we start learning the technical side of things, that it is impossible to separate the fundamentals from the Forex Market.

The Fundamental approach is based on an all around examination of economic data that is published on a day to day basis. For example one might follow the Gross Domestic Product of a country, in order to know the health of the economy while another might compare GDP results of two different economies, to try to understand which economy’s currency will provide a better return.

Fundamental traders combine the data together to reach assumptions regarding a currency pair.
It is also important to note that if a currency trader can combine the art of fundamental analysis with technical trading, he/she will have an arsenal of tools that can assist in finding high-probability profitable trades.

Even though there are tons of different indicators affecting the market on a day to day basis, this tutorial will focus on the major market movers and explain their impact on the Forex Market.

Where to Find the Data?

Before we start explaining the major economic events and how they affect the currency market, this chapter will show you how to find the data and most important how to read and interpret the results.

As shown on the illustration below, the economic calendar is accessible from the dodjit website by simply clicking on the “tools” button on the top of the screen.
The calendar lists the important economic events for the day, by the time at which they occur (or at midnight if they do not have a specific time).

     

As stated above, you can use only technical analysis to trade, but you must remember that the currency markets are driven by major fundamental announcements. It is important to know exactly when these announcements will be released so you can take advantage of the big moves that follow, or avoid losing through a sudden surprising reaction.

Trading tip- Sometimes consolidation takes place before a major fundamental announcement which allows a news trader to comfortably enter the trade.
The economic calendar always shows in advance what time the economic data release is going to take place and once it is released it can often present a major move. (This is explained in depth further on in this lesson, so keep reading )