Introduction to Fundamental and Technical Analysis
Typically, fundamentals are about the long term; technicals are about the short term. Keep in mind what Lord Keynes once wrote: "In the long run, we are all dead." Given the high leverage of currency trading, the long term may be of limited value to the retail FOREX participant.
A practical and sensible way for the small trader to access the value of fundamental analysis is in monitoring and watching the myriad of news releases on the fundamentals for each currency. It becomes not so much attempting to find the meaning of a statistic or Federal Reserve statement and where it fits in to the grand scheme of things, but how the market reacts to it.
Tip: The impact of news is where the fundamental analysis rubber hits the FOREX road. Here is where the new trader may meaningfully dig deeper.
By Michael Duane Archer