CHAPTER 3 OF THE TRADING COURSE OF BINARY OPTIONS, FOREX, SHARES, COMMODITIES, INDICES AND CRYPTOCURRENCIES (FUNDAMENTAL ANALYSIS)

In the previous chapter we commented on the 2 types of analysis that should be done when doing trading. In this opportunity we will develop a little more what is fundamental analysis, which is the way to look at the market through the economic, social and political forces that affect supply and demand.

Much of the fundamental analysis is done taking into account the most important events taking place every day in the main financial markets such as: Australia, Canada, China, France, Germany, Greece, Italy, Japan, New Zealand, Portugal, United Kingdom, Switzerland and the Euro Zone.

For ease of traders have compiled those main events in economic calendars such as the one in the image below and can be viewed in real time and set according to the schedule of the country where we are viewing and according to other parameters that we want to follow this link.

In the economic calendar you can see:

• Time at which the economic event will take place.
• Flag of the country to which the event affects.
• Description of the economic event.
• Importance of the event (column Imp.) Depending on how it can affect the movement in the markets. On a scale of 0 to 3 we have:
  • 0/3 bulls, indicates an event whose forecast is that it hardly affects the volatility;
  • 1/3 bulls, indicates a low expected volatility;
  • 2/3 bulls, indicates moderate expected volatility and
  • 3/3 bulls, indicates a high expected volatility. -
• The Current column shows the updated data of events that have already taken place, as long as it is an event that can be associated with a quantitative value.
• The forecast column shows the forecast of the value that the event can take, as long as it is an event that can be associated with a quantitative value.
• The previous column shows the last value of the event, as long as it is an event that can be associated with a quantitative value.

WHAT CAN THE ECONOMIC CALENDAR HELP ME?

When you trade in the Forex market or other financial instruments such as stocks,  indexes, ... it is very important to visualize the economic calendar, because there is news that can affect our trading. When relevant news comes out, a volatility increase is usually produced. You can skip your stop loss (security mechanism to limit losses that we will see in another chapter) or you can boost your profits in a matter of minutes.

For example, if you are investing in a currency pair such as the EUR / USD (EURO against the US Dollar) any important news or economic data related to the Euro zone or the United States can affect the volatility and make the price Rise or fall according to the meaning of the news or the data.

In the image below we can observe one of the events that monthly moves more the price that is the  U.S. Nonfarm Pyrolls , this news in August of 2016 came out better than expected for the dollar.

According to the image before the dollar strengthened, any currency in front of it, WEAK, that is why in the image of the EURUSD, the Euro low in price against the US Dollar.

As in the previous pair of currencies, it occurred in the GBPUSD, in which the Great Britain Pound low in price against the strength of the US Dollar.

FUNDAMENTALS FOR STOCKS, COMMODITIES AND CRYPTOCURRENCIES

Basically it is important to use the calendar indicated above for any trade, but it will have to include the daily news forecast for each sector in the case of stock and commodities trading, as well as the information or the particular events of each Company, its dividend distribution, Change in the directory, event in which they show some product that will go on sale, etc.

For commodities it is important to follow up the news of environmental impact and catastrophes that could affect the production of some comodity, meetings of organizations related to for example oil, in the event that this is the asset that we are trading.

Last but not least are the news related to the crytptocurrencies, from the launch of icos, to news that affect both the criptomonedas in general and some in particular, this can help us in the trading of crytptocurrencies.

Below you will find some of the events that represent the movement opportunities in the cryptography and block chain industry. (Information obtained from the web https://www.coinschedule.com/)

REMINDER

• I remind you to follow me, following my user so you do not miss any chapter of the course.
• I remind you to upvote this and every post to reward the effort. Thank you.
• I remind you that in reply you can ask any questions regarding the chapter of the course in which you are replying.
• I remember reading the other post so that you follow the thread of this course, so far we have 4 including this one.
• Introduction that you can see in the following link
• Chapter 1 Generalities that you can see in the following link
• Chapter 2 Types of Analysis that you can see in the following link