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  1. Beginner
    Early Stages for Beginners
    8 Topics
  2. Forex Terminology
    11 Topics
  3. Margin & Leverage
    2 Topics
  4. Personal Psychology Questions
    2 Topics
  5. Psychology for Beginners
    7 Topics
  6. Intermediate
    Identifying Scams
    2 Topics
  7. Brokers for Beginners
    5 Topics
  8. Technical Analysis
    13 Topics
  9. Market Structure
    5 Topics
  10. Completion
    Risk Management for Beginners
    8 Topics
  11. Fundamental Analysis
    9 Topics
  12. Advanced
    Using Indicators
    6 Topics
  13. Technical Analysis (Part 2)
    8 Topics

Why Fundamentals are Important

YO! So pay attention. Don’t skip this section. I don’t care what any of the Lambo bros tell you. Fundamentals are JUST as important as technicals. I’m tired of people online saying: “Only technicals matter. Who cares about fundamentals? They’re already factored into the price.” And while a part of fundamentals may be factored into price before the news even releases, you have to treat Fundamental Analysis with the same respect you do technicals. Remember that. Or a news release will wipe you clean out! 

Have you ever thought of how we get our news? I’m talking like CNN, FOX type news. There are many different types of news outlets. These days, you can hear news on the radio, see it on TV, read it in the newspaper, or find it on social media. News is something that we are exposed to on a regular basis. 

Just like in everyday life, there is news in the foreign exchange market too. 

Fundamentals can cause SUPER FAST movement in the markets in a split second. I’m talking Usain Bolt fast. They’re able to generate such large amounts of liquidity within the market in a short period of time by government officials simply speaking about the current state of the economy and upcoming changes to the economy. If the United States unemployment rate is getting worse, the US Dollar will be heavily affected in a negative way; specifically 8:30 on the first of every Friday when the actual news releases (Non-Farm Payroll). Also, if you have an exact bias for the pair you’re trading, it can be completely altered based on what news event is about to be released. UNPREDICTABILITY RULES THE MARKET when fundamentals are released.

NOTE: Sometimes, what they’re about to announce is clear as day, but that doesn’t mean the market will do exactly what it’s going to do. For example: If Interest Rates rise and it strengthens GBP but you figured GBP would rise based on rumors via various news outlets and what the Bank of England has been hinting at, that’s still not a guarantee that price will shoot up. You could enter for a buy, and the price can DROP 50-70 pips, wicking everybody out, before skyrocketing!

OH! And keep in mind, the spread will widen. GO FIGURE! Pairs that are used to seeing spreads of 3 and 5 may see spreads of 16 and 21 when fundamentals are announced. Some, even higher.

Be very careful trading during news.