Читать книгу Kathleen Brooks on Forex - Kathleen Brooks - Страница 8

The term fundamental analysis is very widely used, but what does it actually mean? The definition of fundamental includes:

The foundation or base, forming an essential component of a system and something of great importance.

There are also musical, religious and scientific definitions of fundamental but its definition in relation to the FX market is quite specific – it is the study of the underlying factors that drive a currency’s price. In the FX market these underlying factors include the economy, central banks and politics.

We use fundamental analysis in the forex market to help us answer a few basic questions related to these factors, for example:

1 Which economies in the world are growing?

2 Is the growth healthy and sustainable?

3 What are governments and central banks doing to manage their economies?

4 What is the political situation?

The forex trader making use of fundamental analysis takes the answers to these questions and applies them to the decisions they make when placing a trade in the forex market. To explain how this is done I will work through some real-life examples of how to trade using fundamental analysis later in the book.