Tips on Trading with Fundamentals
- Be aware of the release dates for major fundamental indicators. Keep an economic calendar on hand and note that markets will often react in anticipation of a specific indicator or report.
- It's very important to recognize that market expectations can have a bigger impact on currency prices than actual data. For this reason, investors should pay close attention to market estimates and be on the alert for any major discrepancies that could lead to highly volatile trading environments.
- Often, prior period data will be revised along with the release of the current period's data. Pay attention to revisions from the previous month as they can significantly alter the markets understanding of the current data.
- Pay attention to the "core" data reports and not just the "headline" report, as they can often tell very different stories.
- Recognize the value of fundamentals when used in conjunction with technical indicators; often, one can be used to verify the other's signals.
