How To Find Winning Trades With Fundamental Analysis

We interpret and explain price moves in real-time. Master fundamental analysis and understand the markets.

Learn more here https://bit.ly/37iEnSJ:

Read below to find out how you can find winning trades with fundamental analysis in three simple steps.

-------

In this video, we will be looking at a three-step guide to help you actually find a trade, once you have identified an opportunity based on that long-term fundamental outlook. We will also be introducing you to an extremely important concept, called sentiment. This is going to be vital to your understanding of how and why currencies move on a very short-term basis.

If you want to be a day trader and you do not know about sentiment, then you are doomed to fail from the very start. So let's begin with the three-step checklist that you need to complete when looking for trading opportunities based on standard fundamental analysis. Trading with the longer term fundamentals is perfect if you have a full time job or if your schedule only allows you to engage with the markets on a part-time basis.

The first step we are going to look at when trying to find a longer term opportunity is that of finding the cause of the most recent price move. This will tell you a lot about whether or not there is an opportunity at all. For example, if your fundamental analysis is telling you to look for buying opportunities on the pound-dollar currency pair, then you need to take a look at that pair and see which way the price has been moving. You are trying to assess whether or not the market is simply trading in a way that gives you a better price or telling you about a shift in the fundamental picture.

The second step is to fully understand exactly what the big picture fundamental outlook actually is. The best question to ask at this stage, what is the central bank most likely to do next with their monetary policy? And is that likely to be positive or negative for the currency? The answer to this question is heavily related to the answer to the question we asked in step one. This is because if the reasons the price have been moving recently do not change that big picture fundamental outlook, then we have a clear opportunity to buy or sell this currency pair back at a nice better price.

Getting to grips with this concept of changing outlook is one of the most important elements of trading the fundamentals. Once you master this you'll have a very solid way of valuing currencies and identifying profitable trading opportunities.

There is of course a third and final step to finding a great trade opportunity when using fundamental analysis. And this step is all about finding a good entry point. Getting into the market is important because it will determine how much you risk and also how much profit you will make. Enter the market at a bad price and you will have a higher chance of getting stopped out and have a lower profit potential.

Sentiment is something many retail traders overlook or are not even aware of at all, but it is essential to anyone who wants to understand how the markets move on a daily basis throughout each of the major sessions. One of the questions we get asked on a regular basis is how do professional traders know which currencies to trade and which way to trade them as they sit down at their desks each morning. The answer is sentiment. Sentiment is one level up from fundamental analysis. Whereas the fundamentals focus on the facts surrounding which way currencies should be moving, the sentiment focuses on which way they actually are moving and the reasons why. Sentiment simply means the mood of the market. So just like people have different moods and emotions, so does the market, because after all, the market is just a large group of people all engaging with one another electronically.

The key, of course, comes back to having that understanding of the markets and then knowing how to trade that and take advantage of those opportunities. Whether or not you are a part-time trader or a day trader, an understanding of both the longer term fundamental picture and the current short-term sentiment of the market is going to be pivotal to your success. Now that you have the framework for understanding the market and finding trades, you'll find it's much easier to find high probability trading opportunities.

--------

If you find this content helpful, you’ll love Forex Source. There’s a link below were you can learn more about it https://bit.ly/37iEnSJ

Видео How To Find Winning Trades With Fundamental Analysis канала Financial Source