GKFX Whiteboard Wednesday - 3 Ways To Improve Your Fundamental Analysis

By GKFX Team  |  24/05/2017 13:57

Hello and welcome to Whiteboard Wednesday, Chief Market Analyst here at GKFX, and this week we’re looking at 3 ways to improve your fundamental analysis. Now, this subject is of course very apt at the moment, with all of the headlines coming out of the White House, around President Trump, the FBI and all the geopolitical stories that are dominating the markets at the moment. So with that in mind, let’s look at these three tips for today’s video.

Number 1: Never discount anything. It doesn’t matter if you are trading long Vodafone shares or you are day trading on USDJPY, you must always keep an eye on all of the economic and corporate data, the numbers are all important no matter what is being traded. Every single piece of economic data can move all different aspects of the market, so never discount something because you don’t think it’ll move the asset that you’re trading. Everything can move everything.

Number 2: Beware the big numbers. This seems self-explanatory, but always be aware of when the big numbers are due for release. We’re talking the NF Payrolls, the interest rate decisions; these things may not be as important economically or to you personally and what you think for what you’re trading, but everything moves the markets. The problem with the big numbers is unpredictable volatility and of course volatility is not always in a favourable direction, so beware of big numbers and their resulting swings in the market and know when they’re coming out.

Number 3: Markets do not always react the way you expect. Again, this comes back to the last point, that when we receive bits of economic data, whether that be the Payrolls or interest rates, or corporate stories; remember fundamental analysis isn’t just the reading of the economic calendar, it’s all news. Even if you’re looking at things like Apple or Tesco earnings that might on the front of it look positive, the market can move in a different way. Just because you get a positive number, it doesn’t mean the markets go up and vice versa. You have to look at what those numbers mean in the bigger picture, and that’s what fundamental analysis is about. We don’t just look at those bits of data, we have to look at the news stories and the news flow, and they are some of the most important things, remember, fundamental data moves the markets all the time.