LET'S TRADE, LET'S BUILD OUR FUTURE! Forex Trading Tips Part 5

FUNDAMENTAL ANALYSIS

Now, I'd like to tell you how to trade forex by fundamental-analyzing. Fundamental analysis is a method to analyze an economic's condition of a company based on its economic fundamental. Fundamental analysis of a business involves analyzing its financial statement and health, its management and competitive

advantages, and its competitors and markets.

When it's applied to forex trading, the analysis focuses on the overall states of the economy, interest rates, production, earnings, and management. Fundamental analysis is performed on historical and present data, but with the goal of making financial forecast. The point is, fundamental analysis emphasizes how to read an economic condition. Fundamental analysis for forex trading means we forecast the price movement of a pair by analyzing a country's economic condition (mostly based on the latest condition). We have to be a;ways up to date to the world's economic news.

For example, before we open a position of EUR/USD pair, we know that Eurozone's economic condition is in trouble such as the declining of the Purchasing Manager Index (PMI), so it would be better if we open EUR/USD in sell position. PMI is one of the most notable economic data because of its sentivity to inflation rate change. PMI is a report of a purchasing manager survey of a big company in big countries. Let me tell you how to use PMI. For example, if Eurozone PMI's rate is above 50, then it will indicate that the price of EUR will move up. The conclusion is we can open EUR/USD in LONG/ buy position. The rate of PMI will affect the fiscal and monetary policy and it makes PMI become one of the most popular indicator for fundamental analysis.

There is another important economic data as well as PMI. That is Nonfarm Payroll employment (NFP). It is an economic indocator released monthly by the United States Department of Labor as part of a comprehensive report on the state of the labor market. It is a compiled name for goods-producing, construction and manufacturing companies. The Bureau of Labor Statistic releases the data on the first Friday every month. The NFP number is meant to represent the number of jobs added or lost in the economy over the last month, not including jobs relating to the farming industry. NFP is much influential, it affects the US Dollar, the forex market, and the stock market.

Anybody knows how to interpret this data to forecast the price movement of a pair?

If NFP number of this month is higher than the previous month (the present data is higher than the previous one), the US Dollar will always be stronger against other currencies. So, if the number of NFP moves up, you can open EUR/USD, GBP/USD, or NZD/USD in SHORT/ Sell position while USD/JPY or USD/CAD in buy position. As we know, US is now currently facing a problem such as "fiscal cliff" or the declining the number of the latest NFP. As the result, EUR reaches the strongest point in last 6 months against EUR/USD.

There is another screenshot below, when the data of NFP was released, EUR/USD goes up!

There are more indicators actually such as Consumer Price Index (CPI), Producer Price Index (PPI), etc.

But unfortunately. I don't know much about them, and I usually use NFP data release. Just pay attention when will the data be released in a certain country or what economic policy will be made by a government.

You can see the schedule in forexfactory.com or http://www.fxstreet.com/fundamental/economic-calendar/.

Just remember, the better data, the more profit you can take from BUY position. On the contrary, the worse data, the more profit you can take from SELL position.

Good luck and have a nice trading!

Source: wikipedia.org
             Futures Monthly MIF

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2012 IN REVIEW

Finally, 2012 has elapsed. There were so many events we had experienced. Some of them would be always remembered. Some of them were considered momentous because of the popularity for people in the world. I myself have some preferences to be considered as an important events for 2012:

SPORTS:

1.      Some of my favorite teams were successful to be a champion of season 2011/2012: Real Madrid (Liga BBVA), they even broke a record to be a team with most goals scored and a team with most points of all time in La Liga. Ajax Amsterdam (KPN Eredivisie) finally was a champion after they finished in 6^th position in half-season.

2.      Manchester City (MC),champion of FA Premiership, had better luck than Manchester United (MU) in this season. After beating MU in both leg 1 and leg 2, MC  finished with the same point as MU; 89. But MC had more goal scored than MU.

3.      Juventus made a new record as the only invincible team in Serie A and finished as a champion with 84 points. Dortmund showed their supremacy of Bayern Munich for two years in a row after grabbed a Bundesliga title. Dortmund even succeeded in achieving both Bundesliga and DFB Pokal trophy.

4.      Congratulation to Montpellier! They could grab a French Ligue 1 title vigorously. It’s not easy to be a champion because there was a great competitor with  full ammunition; Paris Saint Germain.

5.      Chelsea, grabbed their first trophy in UEFA Champion League 2011/2012 after defeating the host, Bayern Munich! It made them as the first team from London who can win this competition. But then, they lost their power after Atletico Madrid (champion of Uefa Cup) beat them 4-1 in UEFA Supercup.

6.      Spain grabbed their 3^rd title of EURO CUP after defeating Italy 4-0. They also made a new record as a team who could be a champion twice in a row.

7.      Zambia gave Ivory Coast an unforgettable nightmare in Africa Cup final stage, February this year. FYI, Zambia was a new champion in this competition.

8.      Chorintians, a champion of Copa Libertadores 2012, beat Chelsea 1-0 in a tremendous final stage of FIFA Club World Cup 2012.

9.      Mexico claimed gold for Men Football in 2012 London Olympic after smashed Brazil 2-1.

10. United States, claimed a gold medal for Woman Football cup in 2012 London Olympic.

11. Singapore succeeded in making them as a champion of AFF Cup with most trophies after drowning Thailand with 3-2.

12. Sriwijaya FC was successful in grabbing both Indonesia Super League and Indonesia Inter Island Cup 2012.

13. London 2012 Olympic was the best Olympic to me although Indonesia claimed no gold medal this year. The US was the best team in this Olympic followed by China. Don’t forget about Jamaica! The country ruled the running track.

14. Michael Phelps was considered as the most successful Olympian of all time with 18 gold medals.

15. Miami Heat was a champion of NBA for this season.

16. Sebastian Vettel  was considered as the youngest F1 racer who could be the number one in a season three times in a row.

image source: ausmotive.com

17. Jorge Lorenzo was the number one of Moto GP 2012.

18. Lance Armstrong’s scandal brought him to the   fall of his career. His previous title were removed.

19. Indonesia retrieved their gold medal this year in All England. Tontowi/ Liliyana made it!

INTERNATIONAL:

1.      Syrian crisis along this year seemed not to come to the end.

 image source: vovworld.vn

2.      Norodom Sihanouk, former king of Cambodia, died at age of 89 years old

3.      Barrack Obama was elected to be the president of USA for a second time.

 image source:photo-bugs.com

4.      Neil Armstrong, the first man walking in moon, died at age of 82 years old

5.      Windows 8 was released this year.

6.   The Dark Knight Rises Premiere in USA was attacked by a gunman and killed some people. There was also an Indonesian wounded.

7.      Sandy storm attacked Manhattan several days before president election.

8.      Bopha storm in Philippines killed hundreds people.

9.      Newsweek released its last print issue due to the developing of technology. Newsweek will focus on digital edition next year.

highsnobiety.com

10.  Euro crisis and the increasing of unemployment rate in some countries (especially Spain) colored the world’s economic condition.

11.  Francois Hollande was elected as a new Prime Minister of France.

12. North Pole had the worst shrinkage this year and threatening most animals there.

13. Psy’s Gangnam Style influenced the world by its phenomenal dance. Its video recently had been the most-viewed-video in Youtube with more than 1 billion viewers.

14. Palestine finally got their new status, that is a non-observer country in the United Nations (UN). In a voting held in UN headquarter, New York, only 9 countries said no including Israel.

15. Marvel’s The Avenger was the most successful movie this year followed by The Dark Knight Rises.

16. Walt Disney bought “Lucasfilm”. As we knew, Lucasfilm was known for its Star Wars.

17. “Innocence of Moslem”, a film by a Jewish, rose moslem’s rage over the world. This film was supposed to insult Prophet Mohammed.

18. Rohingya conflict in Myanmar made a number of moslem evicted from there.

19. US “Fiscal Cliff” had been the most popular economic issue this end of the year.

Well, I hope this 2013 everything will be better. I have some plans this year and I hope I can make them happen. Last, I wish the world would be more peaceful and I wish there would be more people aware of environment issue.

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LET'S TRADE! LET'S BUILD OUR FUTURE Forex Trading Tips (4)

Finally, after a long time I didn't post the trading tips, I missed it. So now, I'd like to tell you how I gain profit. It's okay to buy or sell a pair based on the trend. If the pair has an upward trend, just follow the market, you buy it! On the contrary if the "change" turns red, or the pair is in negative trend, you sell it. But, I always do this to maximize my profit; I place a pair in both buy and sell. It's an effective strategy when the price suddenly goes down from the uptrend or or on the contrary.

The most important thing to remember in this strategy is to set an "exit-target". So, we make a "profit" target, at least it's a 8 pips to set a target. To do this, just click on an active/ open pair, and then click change, and set an exit target as you wish. Your transaction will be automatically touched when the price touches the exit-target. There is also "exit stop-loss" feature. This lets you close the pair when you gain a loss. It's the same as exit target, it has a minimal spread, that is 8 pips.

We know, that making a transaction according to market condition is the simple way. But, it won't make a big profit. You can double your profit by placing both buy and sell pair. Just remember, all of trading methods contain a risk (and of course a return). I'll tell you about fundamental analysis on the next post. See you......and I hope my post is quite helpful for your forex trading activity :)

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