Many of you know from reading the Trader's Blog that we often talk about, and advocate, technical trading. Today's guest blogger, Georgia Anderson of GAFNN.com, also looks at "the other side of the coin," fundamental analysis, but she uses it in a way that is almost technical.
In this post, Georgia is going to give us her perspective on forex and fundamental analysis by way of an input-output matrix.
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Technical analysis or predicting the market by looking through the previous history a currency pair is a very useful and indispensable tool that every forex trader uses, however, fundamental analysis, like its name suggests, is more fundamental in nature, and tries to see what drives the forex market in the first place.
There are thousands of market drivers that move and influence the forex market and this fundamental data can be used in a very technical way. One way to take care of these is through the approach of an input-output matrix. This matrix contains information about the factor and its influence. In simple terms, the cause and effect due to one particular factor is captured as numbers in a matrix. By doing this for all the important factors, one can get an input-output matrix that well describes the future potential market movements. Continue reading "Forex Fundamentals: The Other Side Of The Coin"
