Currency traders all have their own ways of determining when to buy a currency, when to sell a currency and when to do nothing. Some currency traders like to use only technical analysis, some only like to use fundamental analysis, while others like to use a blend between the two. I personally like to use more of a fundamental approach with a side of technical analysis (sounds like I’m ordering some take out food). Me being more of a fundamental kind of guy, I commonly look for the latest fundamental economic developments, among other things, to help me make good currency trading decisions.
I know that fundamental economic developments isn’t one of those terms that everyone knows about, so I’m going to take this time to explain what I mean when I mention it. When I say ‘fundamental economic developments’ I mean basic, elementary statistical data that pertains to an economy. Statistics data like employment data, inflation data, retail sales data and more. When a new piece of statistical data is released like United States employment information, that would be a fundamental economic development.
In fact, all fundamental economic developments are well known economic indicators. Since the term ‘economic indicators’ is more commonly used than ‘fundamental economic developments’, please check out my post about economic indicators to get a better understanding.