What is fundamental analysis?

• If a well-known company has poorly reported for the quarter and has received less profit than expected, this will upset investors: its shares will no longer be so attractive, will begin to be sold, and the price for them will fall down.
  A long rainy season in America can ruin the cotton crop: the volume of the available consignment will be less than planned and prices will soar.
  All of these are important factors that are inextricably linked to trading and are called fundamental analysis.

• Leading and lagging economic indicators

  Leading indicators Indicators of this type help to make a forecast about future country's economy changes. Any shifts in their values warn that we will soon see a similar negative (or positive) effect in other national sectors.
  So you can predict, for example, the impending recession, as Central Banks representatives usually do: they determine in advance the vector of development and adjust the monetary policy by raising or lowering rates. The same data is used by private traders to adjust their strategies.
  Among the leading indicators are:
  Building permits. The more permits are issued, the brighter the prospect of construction and other related areas. The growth of the indicator displays a future decrease in the Unemployment rate, as well as a rise in Home loans.
  Consumer Confidence Index. In general, it shows whether people are ready to spend money this month or not. It also helps to determine the situation in the employment field and the economy overall, up to the production prospects.
  Primary claims for unemployment benefits: more or less unemployed people were there in a certain period. In conclusion, it affects GDP, taxes, consumer prices etc.

• Major economic indicators

  Open the economic calendar at Outlettick.com and find major economic indicators with two or three exclamation marks. These are publications of statistical data that have the strongest influence on the currencies of the related countries.
  Typically, traders pay attention to the difference between the actual value and the forecast. The more this difference the more volatility could occur on the price chart of a dependent asset. Most often, it is the national currency of that country the news is published.
  More often, you will follow the US news (they are most understandable for beginners) and the focus of your attention will be on the dollar – USD. If the American statistics turns out to be good (better than analysts' forecasts), then get ready that the EURUSD chart can go down: yes, the dollar rate, in this case, will increase but pay attention that it stands second in the pair. Accordingly, the price of the euro in dollars will fall.
  If it is easier for you to open clear deals, choose the USDJPY chart: the dollar is first there, and the Japan markets (JPY) are already closed by this time.
  If the released data will affect the growth of the dollar value, the pair chart will grow up (the direct dependency).