Traders who integrate fundamental analysis into their strategies can navigate these uncertainties more effectively and position themselves for the most important market movements. Kar Yong Ang, a financial market analyst at Octa broker, explains how traders can use fundamental analysis to anticipate market shifts and to take advantage of economic developments.
Based on fundamental analysis
Fundamental analysis is a method to analyze how political and macro -economic factors can influence the future price of an active. Traders normally evaluate geopolitical events, economic releases and trends in industry. Both macro -economic and micro -economic statistics, including GDP, employment data and business profits, are used in the analysis. For example, the German economic delay of 2024, driven by the increasing energy prices and falling industrial output, led to a reduced growth grant of 2025 of Only 0.3%And this influenced German shares and the sentiment of investors.
Government policy and actions of Central Bank have a strong impact on market sentiment. For example, in 2025, fresh American rates for Chinese import Table stagflation problems, which leads to an increase in gold prices and at the same time weaken risk -sensitive currency.
‘Another recent example of how policy influences markets is when President Trump in February 2025 is a 25% rate for imports of steel and aluminum From March 12, the policy was to protect domestic industry, but created a threat of rising inflation and slowing economics, “shares Kar Yong Ang. “The market reaction was fast. By the end of February, CME Midwest has domestic hot-rolled rotation steel costs increased by more than 30% Since Mr. Trump came in his office. American business activity fell considerably, with the S&P Global Flash US Composite PMI output index in February fell to 50.4 of 52.7 in January, the lowest level Since 17 months ago. The fall was attributed to increasing rates and the reductions of the federal government that had tightened the financial circumstances in the industry ‘.
How fundamental analysis differs from technical analysis
Although technical analysis focuses on price cards and trends, the fundamental analysis takes into account broader economic and business factors to predict the value of an active one. Mixing both methods improves decision -making. Those who are only dependent on technical analysis risk that ignores some external factors that can stimulate price increases or valleys, regardless of indicator -based insights. In addition, you can perform both technical and fundamental analyzes to identify more facts to support your trade neval or look for emerging facts for your trading hypothesis. This reduces the risk of implementing rapid, chaotic decisions.
Customer -oriented brokers usually include fundamental and technical analysis options in the toolkits of their trading platforms. The own platform of Octa Broker, Octatrader, has, for example, space, a feed from the expert-composite insights embedded in the app. Space offers relevant and timely trade ideas anchored in fundamental and technical analysis and enables traders to copy these ideas in a few clicks to their graphs, improve decision-making and improve more informed, precision-based trade.
Important economic indicators that every trader must follow
- Gross Domestic Product (GDP). An important measure for economic strength, GDP growth generally increases the trust of investors, which leads to profits from the stock market and increased business investments. Conversely, a contract -binding GDP signals economic need, which often causes market sales, weaker consumer expenditures and potential interventions in the central bank to stimulate growth. In 2024, the American GDP grew by 2.8%Supporting the trust of the stock market.
- Inflation rates. Inflation is an important indicator that erodes the purchasing power of a consumer and forms the monetary policy. Almost all central banks in the world have set inflation goals, usually around 2%. Stable inflation is essential for long -term economic growth. To achieve the goal, central banks adjust their monetary policy. If inflation increases too quickly, the monetary policy is tightened: the interest rates are increased to delay and borrow the expenses. Conversely, deflation often leads to reduced interest rates or stimulus packages.
- Interest rates. Although decisions from the Central Bank about interest rates influence economic growth and exchange rates, the expectations of investors of future interest changes have the greatest impact on the financial markets. Traders look closely for signals because differences in interest nurses between large economies are an important engine of currency preliminary shifts.
- Unemployment and labor market data. Health of the labor market influences consumer expenditure and economic stability. In essence, all major central banks focus on both inflation and employment. Strong labor markets usually support economic growth and can lead to the tightening of monetary policy if the rising wage pressure increases inflation. The most viewed indicator is the American non-farmers lists (NFP), which traditionally has the biggest immediate impact on markets. A higher than expected NFP can improve the dollar hardening and the expectations of interest rate increases, while a weak report can lead to the warnings of the central bank and low bond returns.
- Trade balance and ongoing account. A trade balance – the export of a country about its input – has a direct impact on the currency value. When there is a commercial surplus (exports the import), the currency of the country strengthens: foreign customers must acquire the domestic currency to arrange payments for products and services, which drove the question. A trade deficit (the input that exceeds exports), on the other hand, weakens the domestic currency because more money is exported to buy foreign goods, increasing the delivery of the local currency in foreign markets.
How traders use economic agendas
Economic calendars are essential means for traders, because they offer planned releases of important economic data, statements from central bank and geopolitical events.
Traders who follow the events can anticipate potential market fluctuation and prepare a potentially profitable trade or apply risk management. For example, set or fit stop relocations, and close all positions to maintain potential volatility. It is important to protect your funds, even if you strongly anticipate specific decisions about interest, inflation, and so on. From time to time, the market is confronted with monetary policy when a central bank makes an unexpected decision that insist on market volatility: the negative interest rates of ECB in 2014, FED’s emergency reductions in 2020, or the tariff disorder of Bank of Canada in 2023.
Risk management in fundamental analysis
Volatility is a natural edition for every trader, especially during major economic events. Decisions from central bank, inflation levels and political tensions tend to activate aggressive price movements, making risk management a core component of each strategy. Professional traders use hedging instruments and cautious position to contain possible losses to control these movements.
Geopolitical events are a good example of the impact of external forces on the trade. For example, the war in Russia-Ukraine, for example, Disturbed energy supplies and increased oil pricesRewarding the traders who had anticipated these shortages in the offer. Those who kept a close eye on geopolitical events and taking a position -adjustments could benefit from such price fluctuations, so that the inclusion of geopolitical analysis in trade models was confirmed. President elections are another event to look at. Traders who followed the American elections of 2024, for example, could have prepared for market volatility by anticipating the rates of Trump and his more friendly attitude towards the crypto industry.
By keeping track of important economic indicators such as GDP growth, inflation and interest rates, long-term traders can make predictions and adjust their positions to take advantage. Linking fundamental knowledge with technical analysis makes it possible to make trade strategies stronger, improving the decision -making process. This approach also improves risk management as traders analyze more factors and better identify potential price movements.
Trade includes risks and may not be suitable for all investors. Use your expertise wisely and evaluate all associated risks before taking an investment decision.
About octa
Octa is an international broker who has been supplying online trading services worldwide since 2011. It offers commission -free access to financial markets and a variety of services used by customers from 180 countries that have opened more than 52 million trade accounts. To help its customers achieve their investment goals, Octa offers free educational webinars, articles and analytical tools.
The company is involved in an extensive network of charity and humanitarian initiatives, including the improvement of educational infrastructure and discount projects for supporting local communities.
Since the foundation, Octa has won more than 90 prizes, including the ‘most reliable broker Global 2024’ Award from Global Forex Awards and the ‘Best Mobile Trading Platform 2024’ by Global Brand Magazine.