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The Differences Between News Trading And Forex Fundamental Analysis




Forex Fundamental Analysis is usually an intimidating subject for Forex traders and let’s face it, it’s much easier to look at
some technical indicators, moving average crosses, or Fibonacci retracements rather than “reading between the lines” on
Bernanke’s 22-minutes speech and make split-second trading decisions.

But the same could be said about Technical Analysis methods such as the Elliot Wave theory or the infamous Neural
Network based trading, and the conclusion is that in order to master either Fundamental or Technical Analysis, it would
require investments of both time and efforts…



                              The Differences Between News Trading And Forex Fundamental Analysis (Courtesy   of HenryLiuForex.com)
The Differences Between News Trading And Forex Fundamental Analysis




   That’s why FundamentalForexOutlook.com was created, its goal is to make the daunting task of Forex
   fundamental analysis bearable for the average Forex trader, by providing you with the right tools such as:
   breaking news, commentaries, historical charts, and fundamental scores at your fingertips, helping you make the
   right trading decisions.

   Before we dive into the deep end, let’s just take a second to define the differences between Forex News Trading
   and Forex Fundamental Analysis, because for a lot of people, they are one and the same, but that couldn’t be
   further from the truth. Here are some important differences:


                   The Differences Between News Trading And Forex Fundamental Analysis (Courtesy   of HenryLiuForex.com)
The Differences Between News Trading And Forex Fundamental Analysis

                                                                          1. News trading in a nutshell is trading based on
                                                                          surprises, it may or may not have anything to do
                                                                          with fundamental analysis, as it is primarily based
                                                                          on the market perception and psychology by
                                                                          comparing the forecast/actual releases at the
                                                                          time. But Forex Fundamental Analysis accounts
                                                                          for the overall outlook of particular currency
                                                                          based on its economic indicators (such as GDP,
                                                                          CPI, PMI, Trade Balance, etc…), monetary policy,
                                                                          and other breaking news that affects the longer-
                                                                          term value of the currency, i.e. Outlook.

                                                                          2. Another interesting difference between News
                                                                          Trading and Forex Fundamental Analysis is that
                                                                          News traders seldom consider prior releases
                                                                          unless there are significant revisions, but for
                                                                          fundamental analysts, prior releases are starting
                                                                          points of comparison, and a better than prior
                                                                          release figure is usually considered positive,
                                                                          regardless of the news release forecast… Of
                                                                          course this may present some conflict with Forex
                                                                          news trading, but just remember that
                                                                          fundamental outlook is for the long-term; think
                                                                          of it as gravity, it’s always there… Market may be
                                                                          driven by other forces temporarily, but it will
                                                                          eventually fall back in the direction of
                                                                          fundamentals.




             The Differences Between News Trading And Forex Fundamental Analysis (Courtesy   of HenryLiuForex.com)
The Differences Between News Trading And Forex Fundamental Analysis




3. Fundamental Analysis does not change often, and unlike news trading where the market could become
volatile immediately after a news release, fundamental outlook remains unchanged (most times) unless there are
significant evidence in both market sentiment and concrete economic data… The rule of thumb is that unless there
are reasons to change our view, we don’t.

In conclusion, by understanding the basic difference between Forex news trading and Forex Fundamental Analysis
and by using FundamentalForexOutlook.com, it will help you stay on the right side of the market by giving you the
tools you need. You can trade currencies with strong Outlook Score against currencies with weak scores, especially
from a longer-term point of view. The advantage of the Outlook Score is that when a currency is going against it, it
usually will come back, giving you a golden opportunity to place your longer-term trade based on fundamental
trend…

                       The Differences Between News Trading And Forex Fundamental Analysis (Courtesy   of HenryLiuForex.com)

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The differences between news trading and forex fundamental analysis

  • 1. The Differences Between News Trading And Forex Fundamental Analysis Forex Fundamental Analysis is usually an intimidating subject for Forex traders and let’s face it, it’s much easier to look at some technical indicators, moving average crosses, or Fibonacci retracements rather than “reading between the lines” on Bernanke’s 22-minutes speech and make split-second trading decisions. But the same could be said about Technical Analysis methods such as the Elliot Wave theory or the infamous Neural Network based trading, and the conclusion is that in order to master either Fundamental or Technical Analysis, it would require investments of both time and efforts… The Differences Between News Trading And Forex Fundamental Analysis (Courtesy of HenryLiuForex.com)
  • 2. The Differences Between News Trading And Forex Fundamental Analysis That’s why FundamentalForexOutlook.com was created, its goal is to make the daunting task of Forex fundamental analysis bearable for the average Forex trader, by providing you with the right tools such as: breaking news, commentaries, historical charts, and fundamental scores at your fingertips, helping you make the right trading decisions. Before we dive into the deep end, let’s just take a second to define the differences between Forex News Trading and Forex Fundamental Analysis, because for a lot of people, they are one and the same, but that couldn’t be further from the truth. Here are some important differences: The Differences Between News Trading And Forex Fundamental Analysis (Courtesy of HenryLiuForex.com)
  • 3. The Differences Between News Trading And Forex Fundamental Analysis 1. News trading in a nutshell is trading based on surprises, it may or may not have anything to do with fundamental analysis, as it is primarily based on the market perception and psychology by comparing the forecast/actual releases at the time. But Forex Fundamental Analysis accounts for the overall outlook of particular currency based on its economic indicators (such as GDP, CPI, PMI, Trade Balance, etc…), monetary policy, and other breaking news that affects the longer- term value of the currency, i.e. Outlook. 2. Another interesting difference between News Trading and Forex Fundamental Analysis is that News traders seldom consider prior releases unless there are significant revisions, but for fundamental analysts, prior releases are starting points of comparison, and a better than prior release figure is usually considered positive, regardless of the news release forecast… Of course this may present some conflict with Forex news trading, but just remember that fundamental outlook is for the long-term; think of it as gravity, it’s always there… Market may be driven by other forces temporarily, but it will eventually fall back in the direction of fundamentals. The Differences Between News Trading And Forex Fundamental Analysis (Courtesy of HenryLiuForex.com)
  • 4. The Differences Between News Trading And Forex Fundamental Analysis 3. Fundamental Analysis does not change often, and unlike news trading where the market could become volatile immediately after a news release, fundamental outlook remains unchanged (most times) unless there are significant evidence in both market sentiment and concrete economic data… The rule of thumb is that unless there are reasons to change our view, we don’t. In conclusion, by understanding the basic difference between Forex news trading and Forex Fundamental Analysis and by using FundamentalForexOutlook.com, it will help you stay on the right side of the market by giving you the tools you need. You can trade currencies with strong Outlook Score against currencies with weak scores, especially from a longer-term point of view. The advantage of the Outlook Score is that when a currency is going against it, it usually will come back, giving you a golden opportunity to place your longer-term trade based on fundamental trend… The Differences Between News Trading And Forex Fundamental Analysis (Courtesy of HenryLiuForex.com)