CFD trading is not gambling, in which you can rely on luck to start trading. It is mainly based on research data, and no one can make enough profit here without comprehensive research. There are so many indicators that are responsible for market volatility. If we do not gather extensive knowledge regarding the analysis, the data we gather will give us incorrect information. Obtaining incorrect information can force us to make trading moves that may fail. Here in this article. We will discuss step-by-step the procedure for conducting fundamental analysis so that you can take the right actions based on the right decisions.
A step-by-step guide to fundamental analysis:
1. Financial Matters
Financial matters play a major role in market fluctuations, as the economic structure of a country is largely based on the strength of the currency compared to its fluctuations. Before buying a financial instrument in the forex market, novices should analyse the current value of currency pairs based on the US dollar against the currency of any country. For example, we can check the value of the Euro against the US Dollar, which means that if 1 Euro = 1.14 US Dollar, buying a Euro would be profitable.
Popular financial issues such as Brexit may also be crucial here, as several countries have already vetoed the use of sterling in their country. This type of news helps us analyse which types of currency pairs we should use for our trading purposes. In addition, we have to be careful with the movement of gold and oil prices because they can have a greater impact on currency pairs if their prices go up or down.
Without proper experimentation on the financial state of the world, the pursuit of the CFD market can be seen as an attempt at suicide. Losing trades will become more conspicuous because we do not always know everything about how to use the technical chart correctly. It has been proven that the technical chart is influenced by fundamental problems. Therefore, it would be prudent to study financial research issues in depth with fundamental analysis.
2. Political issues
A presidential election in a country can change all socio-economic conditions as investors may pause to invest during elections. It is very common for them not to invest during this time because no one wants to lose money due to uncertainty. The uncertain situation arises because after political changes in the country, different governments take different actions regarding the trading business, including a new type of law enforcement or an increase in the amount of tax. Such changes can severely affect the investment industry and investors can incur heavy losses.
Fear because of these problems makes traders reluctant to invest in a financial instrument at this time, and this behavior creates a cash shortage in the market for a period of time. Thus, the FX platform takes a downtrend . Understanding this political influence on the market helps beginners to determine the actual timing of the trade and can save them from huge losses in advance.
3. Social Issues
The social environment can affect monetary returns based on different cultural movements. For example, a country's negative attitudes towards a particular religion can generate hatred towards that country, and such a situation can be enough to cause an economic downturn. When this type of socio-cultural clash occurs, the market also observes a sudden downtrend in a particular asset, as banks in these countries also invest a lot.
Therefore, beginners should take care of proper fundamental analysis to prepare for the various features of the Forex on เทรด Exness market. In order to keep abreast of such issues, investors can contact market leaders and bankers, who usually share the news in advance in their timeline.
