Fundamental traders are those Forex professionals who focus on the events of different companies to decide whose stock should be bought and which is the apt time for that. It can be said to be related to the but-and-hold strategy common in investment plans. Though, short term trading is not common with the fundamental traders yet there are certain instances where fundamental trading can yield profitable business in short terms as well. Fundamental trading requires extensive analysis of the companies. The fundamental traders analyze the corporate events including reports of expected and actual turnover, splits of the stocks, acquisitions and the reorganizations.
Techniques of Fundamental Traders
In fundamental trading, both macro and micro economics is required. The fundamental traders employ them to predict the market trend or any upcoming shift that can lay impact on the industry. They analyze the existing economic picture of issuer of a specific currency and any important occurrence that can influence that particular country as well as its economy.
There are lots of factors that can lay huge impact on any currency. The glowing examples are Twin Tower Crash or the subprime crisis that led to the current economic downturn which resulted in volatile value of US Dollar. As a result, fundamental traders keep a keen eye on every news around the world, from the General Election in a country to demise of an important entrepreneur of any country. Natural calamity to any diplomatic development- the fundamental traders keep a hand on the pulse of anything and everything happening. Their reaction to an information with the knowledge and experience of the global economics is what decides their earning.
Analysis by Fundamental Traders
Whether you are making a short term trade or a long one, fundamental forex analysis is important. For the amateur fundamental traders, it is important to keep tab of news releases that are crucial to the economy. Watch news channels and read newspapers and watch closely the changes in interest rates, announcements made on trade balance, rate of unemployment prevailing and so on. As you grip on these topics, you will find it easy to read the trends of market. You will also hone your skill to predict the upcoming trend of currency pairing. It is a tendency of the fundamental traders to put impetus on fundamental analysis and overlook technical analysis, however, some of them focus on only economics. Intuition has lot to do with fundamental trading. If you think you are not good at it, technical trading is always there.
Presently, fundamental trading is done using software. Thus, you can download the automated fundamental traders. You can not backtest on the historical data with this software. It has been designed in a manner that it can only forward test because it waits for future event or news release. It trades on the basis of the analysis of actual, previous and future information. No matter which country you belong to, if it has been registered with Daily FX calendar, you can download and make full use of fundamental traders.