When dealing with financial markets and being involved with trading, it is impossible not to be aware about the debate surrounding the fundamental and technical analysis, and the main questions that arise are: which one works best? Can one be treated individually? It is mandatory to take them both into consideration before taking the decision to trade a specific financial product? Well, the answer is that they are both important and one without the other would make any analysis incomplete.
This sub chapter will deal with the basics of fundamental analysis, what it is, where to be found, what to expect from it, how can be used in trading binary options and so forth.
To begin with, one cannot talk about fundamental analysis without taking into consideration the economic calendar and all its implications.
The economic calendar is a series of economic data that is scheduled to be released at a specific date agreed upon on a world wide basis and it is well known in advance. Each major economy releases the economic data for markets to interpret at specific times, known by markets in advance, and this is why sometimes you are seeing prices consolidating before a major economic release to come. That is the result of market hesitating to commit to a direction because the lack of additional information. Once the data is released, the market makes the move. Usually releases like NFP (non farm payrolls in the United States), GDP (gross domestic product) for major economies, central banks interest rate decisions, are information that move markets and make trends end or begin.
In conclusion, a proper understanding of the fundamental factors that influence the pace of the financial product you wish to trade is extremely important and should be part of your analysis about getting into a trade or not.