The Power Of Fundamental Analysis In Forex Trading: Employment Data, Inflation and Interest Rate, and Ukraine-Russia Relations… And More.

The Power Of Fundamental Analysis In Forex Trading: Employment Data, Inflation and Interest Rate, and Ukraine-Russia Relations… And More.

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As mentioned in my previous forex blog post, fundamental analysis and sentiment analysis is very important in forex trading. This is especially important with the current situation in the world. Must admit, during the system development following economic news was not a strong suit, but now it is a must. I have to come up with a serious plan in relation to sentimental and fundamental analysis.

Technical analysis has been great so far as the reasons for trade entries have been accurate. With that said, there is also still room for improvement. Let us review what has happened since the last forex blog post.

Trades That Closed In Negative.

Let us start with the trades that did not go well. But still, with the review, we will learn a lot from the trades that did not go well.

NZDCAD Sell Trade (Employment Data Influence)

The trade initially went well from 4th February 2022. The conviction to take the trade was a number of confluence factors.

  • The price was well below Ichimoku Cloud
  • And the price bounced from the mid line in the channels indicator

The price, however, started moving against my initial sell trade. Reviewing the trade, I can now see I should have taken my profits towards the end of 7th Feb or beginning of 8th Feb.

  • The rejection of short move on 7th is quite significant
  • Price has settled well on top of Central Pivot Points (CPR)
  • QQE indicator has a well-established Long signal.
  • BBSqueeze is slowly moving to Long Signal at the time
  • Time Segmented Volume is also Long
  • And of course, on the Fundamental analysis end of things, Canada Employment data was not good. It could not therefore drive CAD strength against all these other indicators proving NZD is stronger than CAD.

So from unrealized profits of 200 points, I stayed in the trade until the trade moved on the negative. I exited with negative 220 points. Even though the loss is painful, the knowledge gained in analyzing the loss is far much greater.

The key takeaway from this trade is to check the number of confluence factors against a number of divergent factors to determine if to stay in a trade or exit.

The factors to consider should be technical, and sentimental analysis and fundamental analysis (Note the ‘and’ and there is no ‘either’, ‘or’)

Fundamental Analysis NZDCAD
Failed NZDCAD Sell Trade on The Daily Chart

GBPCHF Sell Trade (United States CPI Influence)

Well, took this trade as the price was well below the CPR in the 4-hour chart and after reviewing the trade, it was not a good trade. Price was well above the Kumo in Daily Chart. Since I do not consider myself a contrarian trader, I would have considered it as a retracement; and looked for buy.

The trade was later ‘rocked’ by United States CPI data released on 10th February. This day was very busy in my day job and was not very keen on this release. This release further encouraged me to be keener on economic releases as I had been ‘shook’ with previous economic releases (United States NFP and Bank of England Monetary Policy releases. This was captured in my previous forex blog post, point number 3.

GBPCHF 4-Hour Chart: Fundamental Analysis
Failed GBPCHF Sell Trade on The 4-Hour Chart

USDCHF Sell Trade (United States CPI Influence)

Entry reasons for this trade were the same as GBPCHF sell above. Price was below 4 hour CPR.

Another point learned from this trade is the need to reduce the amount of ‘contrarian’ trades. The price was well above and more settled above the Kumo in the Daily Chart. The plan is not to avoid the trades entirely but to reduce them, and when in one, be keener. The NZDCAD failed trade has further added a new process in reviewing trades already taken.

Took the trade in the morning hours of 10th Feb 2022. This was the morning of the United States CPI data release. Even though my day was busy as earlier indicated, I MUST BE KEENER with Fundamental Analysis and Sentimental Analysis. Anyway, after USD CPI was positive, I was biased to exit the trade. I exited the trade the same day at 2308 H.

The learning points from this is:

  • Review Forex Economic Calendar every day. This means starting the day reviewing the economic calendar and taking note of 2 and 3 stars news releases.
  • Be up to date with credible financial news articles. So far I have created an Expert Advisor that send email alerts when the news articles are released. Because of my day job, I have set time to be reading the articles early in the morning during my morning chart reviews, at 10/11am (will set  time in the office and call it my late morning tea break… we were colonized the British after all 😊 ), during my lunch break, 4pm break, 6pm break, and later 8pm.

The USDCHF trade ended negative 238 points.

USDCHF Failed Sell On 4H Charts
Failed USDCHF Sell Trade. 4H Charts

Trades That Ended In Positive

Now that we are done with the sob stories, let us look at the happy trades.

EURAUD Sell Trade (RBA Governor Speech Influence)

Took the sell trade on 7th Feb 2022, 1600H and the confluence was great on this trade.

  • ADX was increasing
  • BBSqueeze was transitioning from previous buy signal to sell
  • QQE was on Short signal
  • Later TSV volume signal was well on Short signal.

I exited the trade after the price started showing signs of going long.

  • Price had started closing above CPR
  • By then I had been aware on the importance of fundamental analysis and RBA Governor was to speak at 11th Feb 0130H GMT+3. I felt exhausted by the ups and downs caused by economic releases released so far at the time ( I had no idea another bigger news scare was just simmering, and that news ‘dish’ was just getting ready to be served to the financial speculative world)

The trade ended positively at 1771 points.

And just like that, this one trade recovered the losses of the previous 3 trades, and then some 😊. Somebody buy me a cookie.

EURAUD Fundamental Analysis
Successful EURAUD Sell on 4-Hour Charts

AUDCAD Buy Trade (CAD Weak Employment Data)

Even though the price was below Kumo, the main reason for this trade included

  • Price had previously closed above Daily CPR
  • Price Had retrace back in the retracement zone in one of my indicators. (Pink zone in this trade chart).
  • QQE, BBSqueeze, and TSV indicators were indicating Long
  • The markets had by that time digested the sentiment that Canada had release poor employment data the previous Friday.

I exited the trade when the price hit the Base of the Kumo Cloud. Price sometimes bounces from the Kumo on 9th Feb 2022 1015H

The trade was positive 575 points.

AUDCAD Buy Trade
AUDCAD Buy Trade Daily Charts

GBPNZD Sell Trade (United States CPI Data Influence)

Took the sell trade on 8th Feb 2022 after the price closed below the CPR the previous day. The trade was very kind to my blood pressure and was 1200 points in unrealized profits at some point. Of course, the price was affected by the US CPI data release. GBP seems to have a positive correlation with USD and GBP’s values seemed to have increased after the release.

Exited the trade on 11th Feb 0130am after realizing GBP is increasing in value and therefore invalidating my GBPNZD Short trade.

I could be wrong but I believe the trade would have continued with the Short trend if it was not for the CPI news release. But then again, the financial markets are for human beings, involving sentiment and fundamental analysis.

Exited the trade positive 643 points.

GBPNZD Daily Charts
Successful GBPNZD Sell Trade on The Daily Charts

GBPUSD Buy Trade (USA CPI Data Influence)

Took the buy trade on 10th Feb 2022, 1030H. The price had settled 7 days on top of the Kumo cloud (from 2nd Feb 2022). The price had not moved quite far from the same Kumo cloud, it bounced from it on 7th Feb.

The price had also been close on top of the Daily CPR. I decided to pull the Long trigger on the morning hours of the 10th Feb.

I exited the trade in the evening at 1930H the same day as it was being rejected from the previous week’s high. The ups and downs caused by the CPI release were also unnerving, I confess.

The trade was positive 719 points.

GBPUSD Buy Trade
Successful GBPUSD Buy Trade: Daily Charts

Realization Of Importance Of All Round Analysis (Technical, Sentimental, and Fundamental Analysis)

By the end of day 10th February 2022, I had decided I needed to make some changes to my trading decision. The main changes that needed to be done as mentioned many times in this post, I realized I had not given sentimental and fundamental analysis the much-needed attention.

Because of this, I exited 3 trades early the evening of 10th Feb; EURSD/EURGBP sell and USDCHF Buy (painful the pairs went the trade direction I had traded). Yes, the early exits from the trades seem ill-advised in retrospect, but there is much more gain as it provided good enough time for sentiment/fundamental analysis development.

With the realization, there was MUCH NEEDED development of a plan on the 2 analyses.

  • Review Forex Economic Calendar EVERYDAY. Morning before starting morning chart analysis, 30 minutes before 2/3 stars economic releases (aided by an EA that will send the alerts) and the end of day analysis. This will form the fundamental analysis.
  • Be more connected with financial news articles. There is also an EA that is aiding me gather the news and send them to my email. The plan to read the news is as follows; read news new articles in the morning before chart analysis, at 10/11am tea break, during my lunch break, 4pm break, 6pm break, 8pm and 10pm. And also, anytime I’m free and get a chance to read the articles other than the stated times. This will aid in both Sentiment and Fundamental Analysis.

Ukraine-Russia Tensions: More Reason For Definite Sentiment/Fundamental Analysis

Well, on Friday the financial world, basically the whole world, was greeted by breaking news that Russia might invade Ukraine; and oh My did the markets react.

The safe havens were all strong. Gold, USD, JPY, and CHF gained massively. While comdolls (CAD, AUD, NZD) and stocks tanked.

It’s is a good thing it happened on a Friday. The financial markets close and the world gets to know factual news on the situation. We also need to Pray about this, Wars are not nice.

My breaking news EA works fine and I got the news on Friday at 2140 GMT+3. The news source was Forex Live, one of the news sources the EA gets the articles from.

Breaking News Release
Breaking News EA At Work

AOB

In finishing, I have learned a lot in the 2 weeks I have started my real money forex trading. It is true what the literature I was reading was saying about trading, you cannot compare real money trading with demo trading. The price data is the same for both platforms but there is still a very big difference. In demo trading, I was not very keen on sentiment/fundamental analysis, but on live forex trading, there is a need for analysis of the 2.

In finishing, the account has gained 1% since in the 2 weeks of live trading.

Share your comments on the comment section below or on the forum page.

Thank you and may world peace prevail.

4 thoughts on “The Power Of Fundamental Analysis In Forex Trading: Employment Data, Inflation and Interest Rate, and Ukraine-Russia Relations… And More.

  1. Id like to thank you for the efforts youve put in writing this blog. I am hoping to check out the same high-grade content by you later on as well. In truth, your creative writing abilities has motivated me to get my own, personal website now 😉

  2. תוכלו לסנן את החדרים על פי מיקום, גודל, תוספות ומחיר, ובמרחק לחיצת כפתור תוכלו לבחור את החדר המתאים לכם, להתקשר ישירות לבעליו ולקבוע לעצמכם חופשה מדהימה!
    לרשותכם מגוון רחב של סוגי עיסויים וכל שנותר לכם
    הוא רק לבחור את העיסוי המתאים לכם
    ביותר ואנחנו כבר נדאג לתת לכם את השירות הטוב והמקצועי ביותר.
    בפורטל בננה, הדירות הדיסקרטיות נבחרו
    בהקפדה יתרה תוך שמירה על ניקיון ואסתטיקה, נגישות וזמינות, הדיסקרטיות, איכות השירות וסוגי
    השירות. ראשית כל, אתם אמורים לשלם
    עבור השירות סכום כסף מסוים ונשאלת
    השאלה מה התקציב שלכם ואם
    השירות של נערת ליווי ערביה בראשון
    לציון בו אתם מעוניינים לבחור מתאים לתקציב – החדשות הטובות הן שיש מספר לא מבוטל של נערות
    ליווי ערביות בראשון לציון, כך שחיפוש מעמיק יאפשר לכם למצוא שירות אשר יתאים לתקציב שלכם (כדאי לקחת בחשבון שאם התקציב מוגבל,
    זה אומר שבמקרים מסוימים תצטרכו לעשות פשרות).
    כשאתם מעוניינים להנות שירותי ליווי אך אין לכם מקום או אפשרות לארח בביתכם או בחדר
    במלון את נערת ליווי, דירות דיסקרטיות הוא הפתרון המושלם
    בשבילכם.

  3. למשל, ספורטאי מקצועי עשוי להזדקק לעיסוי רפואי מסוג מסויים כדי להתמודד עם פציעה קשה המשפיעה
    על שגרת האימונים שלהם. מבין הטכניקות
    הריפוי הטבעיות תוכלו למצוא מזון ושתייה מבוססי חומרים
    טבעיים, ויטמינים ומינרליים החיוניים לגוף, עיסוי מקצועי
    בבית שמש , יוגה ועוד. הצעירה הכי ליברלית תעביר איתך
    שעות של עיסוי מטורף שיסדר לך את הראש.
    מטפל/ת מוסמך קובע את שיטת מפגש לעיסוי בבית שמש באופן אינדיבידואלי
    עבור כל מטופל. אתה קובע את היום ואת השעה.
    יחד עם זאת, בכדי לשפר את תהליך הניקיון מומלץ לשתות הרבה מים, לבצע פעילות גופנית על בסיס קבוע, לאכול הרבה ירקות ופירות ולהימנע
    ממאכלים מעובדים. היא תלווה אותך לכל אירוע
    שבו נהוג לבוא עם הזוג שלה. לכן בפועל תמיד עושים את מה שבת הזוג רוצה.
    טיפולי חמאם – שיטת טיפול המשפרת
    את זרימת הדם וגורמת לתחושת התחדשות ושחרור הגוף והנשמה.
    כנראה שעבר הרבה זמן ולכן טיפולי עיסוי ארוטי
    בבית שמש זאת הזדמנות מושלמת לעשות משהו שהוא נטו בשבילכם.

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