The importance of fundamental analysis in Forex.

Recently, the number of opponents of fundamental analysis has increased significantly; many traders don't even consider it important when trading Forex.

Why analyze the economic situation or monitor news if the price reflects everything?

The unfortunate result of such reasoning is triggered stop losses, and if the trader neglected to use stop orders, lost deposits.

While it's not always possible to predict how a currency will perform after a particular news release, it's better to be prepared for it and factor it into your trading.

Neglecting this factor is especially dangerous when trading scalping , as this strategy sometimes physically lacks the ability to set a stop loss. Therefore, transactions are exposed to maximum risk, which is amplified by the large volume of positions.

During the release of truly important news, the trend accelerates so much that the order to close the order is executed with a maximum delay, which costs the trader at best a couple of dozen pips, or a completely lost deposit in the case of scalping.

In addition, one cannot ignore the issue of spread widening during news releases. For example, you saw a rapidly rising price and entered the market without noticing that the spread on the currency pair had become 20 pips instead of the usual 2. And this is quite noticeable if you use leverage greater than 1:100.

To avoid surprises, it is easier to take a few simple measures:

• Consider the forex calendar when planning new trades.
• Close positions before the news release if the trade direction contradicts the forecast.
• Monitor the spread size before each trade.
• Trading risky strategies when new developments in the currencies forming the currency pair are excluded.

While trading on the exchange can be done solely based on technical analysis, fundamental factors will always influence the effectiveness of such trading, so it's easier to take them into account than to correct for the consequences of unforeseen events.