Sigma Forex Fundamental Analysis

Fundamental Analysis

Fundamental analysis is a method of forecasting the future price movements of a financial instrument where fundamental traders basically trade the news.
News Trading has the potential to be a profitable way to trade the Forex market. It must be noted, however, that a high level of risk is involved. Fundamental Traders analyze key economic data, including news and government reports, to evaluate trading opportunities.

From the fundamentalists perspective, currency exchange rates are affected primarily by economic and political conditions, and occasionally by central banks intervening in the currency markets in an attempt to influence the value of their currencies.
Some of the key figures tracked by fundamentalists include interest rates, inflation, trade balance, GDP (Gross Domestic Product), CPI (Consumer Price Index), PPI (Producer Price Index), capacity utilization, factory orders, durable goods orders, inventories, and employment statistics. Fundamentalists are also constantly evaluating the potential impact of military conflicts, natural disasters, and changes in political leadership.

There is a whole art and science to Fundamental trading, or more commonly know as news trading. There are regular news events that get released on a regular basis like weekly, monthly, every 6 weeks (FOMC - Fed Interest rates). These are market moving events. Good news for one currency could be bad news for another. Many times the market already has an expectation, whether it is right or wrong, and for the most part has already been priced into the market.
When an unexpected number comes out, that's when the currencies can go wild, and if you're on the right side of the trade you will make money.

News trading is not black and white. A good number for the USD does not mean the USD will increase in value. It could do the opposite. So keep this in mind if you decide to be a fundamental trader vs. a technical trader.

Fundamental traders have to keep up with the news on a continuous basis and they need to understand what those numbers mean. I can't teach you everything there is to know about fundamental trading, but there are services out there that can help you learn.

MACD with Parabolic SAR

Parabolic SAR is more popular for setting stops than for establishing direction or trend.
Parabolic SAR is base on the following rule: to shift the levels of closing prices only in direction of opened position.
If there is a long position opened before, it is possible to increase the level of closing prices, but not to decrease it.
If the short position is opened, it is possible to decrease the level of closing prices.
The indicator can be very effective if a filter of some sort is used like MACD.
If we were long the market, then only long signals would be taken and the short signals ignored as long as the filter has given a buy signal and remains in buy.
Now you can confirm the signal by using the both indicators.
Signal to buy:
When MACD bars is over 0 level and rising, signal line below bars end and rising and SAR dots below price chart.
Signal to Sell:
When MACD bars is below 0 level and falling, signal line over bars end and falling and SAR dots over price.

Understanding Fundamental Analysis with SigmaForex

• Understanding Fundamental Analysis

The two primary approaches of analyzing currency markets are fundamental analysis and technical analysis. Fundamentals focus on financial and economic theories, as well as political developments to determine forces of supply and demand. One clear point of distinction between fundamentals and technicals is that fundamental analysis studies the causes of market movements, while technical analysis studies the effects of market movements.

Fundamental analysis comprises the examination of macroeconomic indicators, asset markets, and political considerations when evaluating one nation's currency relative to another. Macroeconomic indicators include figures such as growth rates; as measured by Gross Domestic Product, interest rates, inflation, unemployment, money supply, foreign exchange reserves and productivity. Asset markets comprise stocks, bonds, and real estate. Political considerations impact the level of confidence in a nation's government, the climate of stability and level of certainty.

Sometimes governments stand in the way of market forces impacting their currencies, and hence, intervene to keep currencies from deviating markedly from undesired levels. Currency interventions are conducted by central banks and usually have a notable, albeit a temporary, impact on FX markets. A central bank could undertake unilateral purchases/sales of its currency against another currency; or engage in a concerted intervention in which it collaborates with other central banks for a much more pronounced effect. Alternatively, some countries can manage to move their currencies, merely by hinting, or threatening to intervene.

Sigma Contract Specification

Sigma Forex provide the clients with the lowest spreads in Forex Market for the most traded pairs and Forex spots.

• Trading Hours

Sigma Dealing Room operate 24/5 from Sunday 23:00 CET until Friday 23.00 CET.
You Can contact us directly: (+44) 207 147 5291

• Margin Requirements

The margin requirements must be respected by Friday at 23:00 GMT and before holidays.

One of our dealers will contact you if you are below your margin requirements at that time. Your margin requirements will depend on the client's account equity. However, if you approach the level where the loss of your open positions approaches the balance of your account, you will be stopped out and your positions will be closed. Stop positions will be executed when there is only around 50% equity of the required margin left in your account.

• Streamline Dealing

Clients will not suffer Price Re-Quote that you can buy and sell directly on real-time prices without a request for quote (RFQ).
Clients taking advantage of wrong price quotes in the Market Watch will be requoted.

Sigma Forex effort is taken to ensure correct pricing at all times. However, there are rare circumstances when wrong prices are given.