Sigma Forex Fundamental Analysis Introduction

Fundamental analysis is the second major method that was developed as a system to predict future currency prices. When one says fundamental analysis he means to the study of the foundation elements that affect a certain economical system. When speaking about currency prices it usually means the study of various economical indicators, social trends and governmental policies, among many other factors. A fundamental analyst can tell you more than just the future price but also how it came to be and what will affect this price in the future.

There are several problems with pure fundamental trade. When dealing with the forex market, you need to delve into complexities of each country's economy, including its policy and social influences. Maintaining a flowing and stable fundamental representation of the global forex market with its immense size and dynamicity can be extremely hard. None the less, your understanding of global economy and the flow of the forex trading market will increase greatly as you dig dipper into the complexities of the fundamental analysis.

Now days it is really hard to state that one is a pure fundamentalist or a technician. Although both groups are indisputably different and place their focus on their chosen systems, some balance is still needed. A technician will still have to take into account some crucial economical data, while a fundamentalist will still need the assist of data generated charts. In general you can say that fundamental analysis helps to produce a solid trading strategy while technical analysis helps you to select the exact entry and exit points. The fundamental trader approaches each trade with the knowledge id the underlying process that make an economy work.