When analyzing economical and political factors in one’s country, understand that it can have an effect on a currency’s supply and demand, which determines the overall exchange rate you see on the market daily.

When it comes to stocks, you look at the value of an investment based on things like: their earnings growth, how strong the company is vs. their competitors, the product/service they’re actually selling, the words of prominent figures within the company, and etc.

In Forex, you look at the economic conditions such as interest rates, manufacturing data, employment data, and GDP! It sounds crazy, but we’re about to go through it all and break it down as simply as we possibly can.

It’s super important to pay attention to fundamental developments in the markets, no matter if you are day trading or swing trading, because fundamentals impact short-term trends AND longer-term trends.

Before you even think of placing a trade or analyzing a chart, make sure you know what economic events will be taking place ahead of your trading day/week.

Long story short; if you want to really understand Forex or really understand a currency pair, don’t forget about fundamentals. The basics are crucial.