Forex Fundamental Analysis part 2 – Traders Who Ignore This Will Fail
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Fundamental Analysis part 2 – How to Read the Markets
Risk-on & Risk-off
This section follows on from The Biggest Fundamental Events Analysis & Case Study. Shakespeare said that All the world is a stage. When it comes to the financial markets, everything is interwoven, from forex, commodities, including gold and oil, equities, treasury bills, corporate and government bonds, futures contracts, and more recently bitcoin. In other words, in order to be able to read the Forex market, you must unerstand that all of the indvividual sectors play a role in your trading.
Trading can then be broken down In two categories : traders and investors. Sub categories include retail traders, who are typically day traders; where they open and close positions during the day with no overnight positions. But, there are also swing traders, who may hold a position from days to a couple of weeks, and then there are position traders (investors) who have a more long term view and may have open trades which run on for months, if not years. The latter will typically be large hedge funds, financial institutions, sovereign wealth funds and governments.
Therefore, position traders and investors tend to have a long-term approach and usually the financial clout to be able to weather the ups and downs and storms which prevail in the financial markets. A typical institutional investor might involve …