What is the difference between a fundamental analysis on the stock market and the FX? - Page 3
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Thread: What is the difference between a fundamental analysis on the stock market and the FX?

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    Super Moderator Gulfstream's Avatar
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    What is the difference between a fundamental analysis on the stock market and the FX?

    There are many significant techniques that determine the direction of movement of currencies and assets.
    Undoubtedly, fundamental analysis is one with the highest priority.

    The value of fundamental analysis is often underestimated or misunderstood by beginning traders.
    A lot of people believe that this type of analysis is useful only to investors or traders with long-term positions. However, it is not like this. If you know the basics and concepts of fundamental analysis, you have an opportunity to find the dynamics of financial markets, which are very important for the development of the trader, regardless of the role of
    fundamental analysis in daily trading.
    The fundamental analysis will be divided into 2 segments of the financial market: the currency and the stock market.

    I will try to cover as much as possible in detail by answering the questions:
    - What is the fundamental analysis and how does it affect the priority of movement?
    - What are the features of the fundamental analysis of the currency and stock market?


    And also I will try to disclose the basic methods of fundamental analysis for stocks, bonds, CFDs and other assets, which are represented on the stock market, with a phased disclosure of the sub-topics:
    - What factors influence the movement of an asset and the stock market as a whole?
    - How to evaluate correctly published news and reports for companies, whose shares are traded on the exchange?
    - Where and from what sources it is possible to receive information about the impact on the movement of an asset?

    When you trade on FX market, you should know the answers to the 2 basic questions:
    - what news you should consider the most important of those published in the news line / economic calendar;
    - how you should read the news and determine their impact on the movement of currency pairs and tradable assets;
    - what economic and political factors you can consider as significant ones for work in the FX market.


    In the segment of the fx market, I will present an assessment of the following fundamental factors according to their degree of influence:
    - macroeconomic statistics of countries-issuers of a particular currency and the largest economies of the world;
    - the results of the meetings of the world's largest Central Banks;
    - Specific factors that affect individual currencies.


    On the stock market, the influence of key fundamental factors:
    - corporate reports of companies;
    - sectoral statistics and forecasts;
    - macroeconomic statistics, especially in the largest economies of the world;
    - meetings of the world's largest Central Banks.


    A distinctive feature of the fundamental analysis of the stock and currency market is that the stock market analysis is conducted on a specific company, its activities and profitability are studied, basing on the published reporting data and company news, etc., along with the economic and political situation in the country.


    During analyzes of the foreign exchange market, the movement of currency pairs is investigated and forecasted. Since there are two currencies of different countries in one pair, the influence of both factors is considered. So, in dollar currency pairs, in which the dollar is quoted, first of all, the economic statistics of the USA and the second presented currency are studied, it is revealed - what news will be the most important and can significantly affect the movement of the currency pair in one direction or another.


    Reviews of the use of fundamental analysis techniques, as well as specific options for market reaction
    on those or other events will be presented on real graphs and examples.


    What is the fundamental analysis and how does it affect the priority of movement?
    Fundamental analysis is represented by methods of assessing and forecasting the forthcoming movement of financial markets and its specific instruments. These methods are based on macroeconomic, financial, production, industry and other data relating to a particular market or instrument.
    In other words, fundamental analysis is engaged in assessing the situation from the point of view of political, economic and financial-credit policy. Information on the interest rates of central banks, the economic course of the government, possible changes in the political life of the country, as well as various kinds of rumours and expectations are important in fundamental analysis.


    In practice to conduct fundamental analysis is not so simple. The same factors may have different market value in different conditions or may become decisive from insignificant ones.


    Thus, the success of a trader in conducting a fundamental analysis depends on an understanding of the laws of the financial market, the ability to compare absolutely unrelated events at first glance. Also, a fundamental analysis assumes knowledge of the general picture, specified by the published news only.
    The fundamental analysis allows us to assess the factors, that can affect the movement of exchange rates over a period of several days to several weeks.


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    Quote Originally Posted by Yayami View Post
    thank goodness my focus always be with forex market because i can put my technical analysis in use with forex market rather than taking any participation to trade the stock market and force me to understand how to do things in fundamental. i only understand few things about fundamental so i've made a solid decision for long time ago that i don't want to go to stock markets but going towards the forex market instead.
    Fundamental analysis is not just important for stocks but also for trading Forex and that is what our supermoderator is explaining to us. This is a useful thread and posts that I think i should read twice at least to grasp what meaning it has. Trading is risky and when a trader dont have good command on analysis or management, the trader can get big losses.

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    Rookie layigold's Avatar
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    I am not used to trading stock though I have been in trading industry for more than twelve tears now and my only area of interest is in currency pairs, metals and crude oil. It is quite interesting to know that economic news especially high impact news affect the market most of the times and that is why a versatile trader needs to have good knowledge of fundamental analysis even if he specializes in trading technical analysis

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    Quote Originally Posted by layigold View Post
    I am not used to trading stock though I have been in trading industry for more than twelve tears now and my only area of interest is in currency pairs, metals and crude oil. It is quite interesting to know that economic news especially high impact news affect the market most of the times and that is why a versatile trader needs to have good knowledge of fundamental analysis even if he specializes in trading technical analysis
    you have experience of 12 years? is it true? but why you are losing can you share some details what are the reasons why you are losing. i think if you just save some $ in 12 hours your account should be big one, so from this seems you have not saved or used some planning in trading just wasted money like me

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    Rookie layigold's Avatar
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    Quote Originally Posted by naeem555 View Post
    you have experience of 12 years? is it true? but why you are losing can you share some details what are the reasons why you are losing. i think if you just save some $ in 12 hours your account should be big one, so from this seems you have not saved or used some planning in trading just wasted money like me
    I started my forex trading career in the year 2005( that was the year of learning and preparation ) and I opened my first trading account in the year 2006 which I lost within two weeks of trading as a result of inadequate experience , patience and discipline . My friend , I did not say that I keep on losing in trading this day having spent more than 12 years in the industry but there are times a trader ( no matter how experienced he may be ) may face loss which should be accepted as part of trading . If you are an experienced trader , you will understand the point I made . Back to the thread topic , to trade stock successfully , you may need to wait fir company's earning reports before taking decision whether or not you will buy the stock of such company but that is not necessary in forex trading

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    Rookie Yayami's Avatar
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    Quote Originally Posted by Abhishekwala View Post
    Fundamental analysis is not just important for stocks but also for trading Forex and that is what our supermoderator is explaining to us. This is a useful thread and posts that I think i should read twice at least to grasp what meaning it has. Trading is risky and when a trader dont have good command on analysis or management, the trader can get big losses.
    fundamental analysis works better with stock market instead of forex, that's what i get from my own observation. between forex and stock market, i'll prefer to stay with forex because i can focus to my technical analysis and stay alert with the news. i just don't really like counting on fast movement in short term from fundamental or expecting something big and volatile after the news release in fundamental.

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    Fundamental analysis should be practically same thing for either the stock market and the forex market, the main difference we can say exists is the places where these news are displayed, while we can easily get news announcements from the forex calendar websites that are scattered all over the internet, same cannot be said about the stock market, this is where they both differ.

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    Rookie Silhouette's Avatar
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    Quote Originally Posted by Ehis View Post
    Fundamental analysis should be practically same thing for either the stock market and the forex market, the main difference we can say exists is the places where these news are displayed, while we can easily get news announcements from the forex calendar websites that are scattered all over the internet, same cannot be said about the stock market, this is where they both differ.
    Stock market is more stable than forex, I assume. The reason because stock is just one product that has shares and values traded by many traders and use the number to change the profitability level everytime. Unlike forex market, each pair consist of 2 different currencies from 2 different countries, of course it becomes more volatile and unstable since both countries has different yet unique issues that may change the outcome of the price every single day.

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    Rookie layigold's Avatar
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    Trading stock successfully requires deeper understanding of the fundamentals of the companies whose stocks you want to trade in but this is not all that required in forex trading though some high impact news do affect the market as well but that not withstanding , you can still trade forex from technical perspective with good success. I only prefer forex because of the higher leverages that are being offered which could be an opportunity to make some nice and decent profits.

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    Rookie Sascha's Avatar
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    Quote Originally Posted by layigold View Post
    Trading stock successfully requires deeper understanding of the fundamentals of the companies whose stocks you want to trade in but this is not all that required in forex trading though some high impact news do affect the market as well but that not withstanding , you can still trade forex from technical perspective with good success. I only prefer forex because of the higher leverages that are being offered which could be an opportunity to make some nice and decent profits.
    trading with stock market is much easier to do because we just have to focus on company's all issues and focus on its growth and possible event that could lead it to some areas we can conclude as buying and selling points. we can focus to trade on one big company like google or apple, then trade along with them. unlike forex market, we must pay attention to two different currency at the same time just to trade one single pair.

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    Rookie layigold's Avatar
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    Fundamental analysis looks at the market dynamics from economic news perspective and there is hardly any financial market that is not affected by economic news when it is released . In stock market , the news that affect the market has to do with the news of the stock in question and access to some inside information could be of help in trading the stock successfully but that is considered illegal in so many places (I mean having access to the company earning news and some others before that is declared to the public )

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