Scalping using Fundamental
Many traders prefer to use technical analysis and are very rare or even unconcerned with fundamentals. Technical analysis is very important to know the right entry and exit level (SL and TP). But the use of technical analysis is not yet perfect to get a comprehensive market overview.
Forex market sentiment is driven mainly by economic and geopolitical news. Key players in the forex market – multinational corporations, world central banks, multibillion-dollar hedge funds and top-level investment banks that serve them – no matter if there is a double top at EURGBP on the hourly chart. Instead, they formulate their trading by analyzing the latest economic news and geopolitical developments, as well as the latest statement from the G-7 monetary authorities. Therefore, the proper approach to forex trading can be summarized as follows: fundamental as a trigger direction, technical for entry and exit.
Traders who trade based on fundamental analysis, usually choose a wider timeframe so using daily and / or weekly charts. While traders who trade with a smaller timeframe then focus on a strict technical setup.
One of the factors driving the forex market is a transparent, macroeconomic news release, impossible to forge and available to all market participants at the same time. The headlines that drive the forex market are government economic data such as the latest employment statistics, GDP growth rates, trade balance reports, inflation readings and interest rate announcements. This report is usually released monthly and can be monitored on an economic calendar. Macroeconomic news that drives this market is already scheduled and published in various media such as Bloomberg, CNBC, Reuters and Dow Jones and can be accessed by anyone from anywhere.
Retail traders often take advantage by reacting more quickly to news releases than to the reactions of corporate market players and hedge fund managers. The effects of economic news will usually be adjusted within a few hours. Within that period, clever retail traders will take advantage of this adjustment situation with short-term scalping as corporate position pressures move the market in the direction of the news released.