Fundamental Analysis

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Fundamental analysis is a set of methods for predicting the development of market conditions based on the analysis of economic indicators, political factors and circumstances of force majeure that reflect or affect the state of the economy of the country issuing the currency in question.

Fundamental Analysis

It is absolutely true that every person every day gradually applies methods of fundamental analysis, and from childhood, when we begin to understand everything we see and hear, and classify them into logical chains: Cold – we have to dress, hungry – we have to eat, scolded – we have to correct and apologize, etc. The same logic applies to a trader’s reaction to the news surrounding him.

Let me explain once again: Fundamental analysis takes news into account. In order to understand more precisely what news affects what and what to pay attention to, it is necessary to categorize news:

  • economic
  • political
  • force majeure

In order:


Economic news. Since the economy of any country operates in a cyclical mode based on key positions (production, employment, the state of external and internal sales markets, both finished goods and raw materials, energy, etc.), periodic reports on these positions are also published regularly. In order not to go into detail about the structure of the world economy and not to plagiarize the macroeconomic course, it is enough to understand that it is this economic news that are published in the economic calendar:

Everything you need to know about this source of information: where to look, what you can rely on in your forecasts and what you should ignore is described in the detailed guide to the economic calendar.

The following should be clear: the economic calendar is the source of economic data for analyzing history and making forecasts for the future. We recommend that you carefully study our recommendations on working with this source – after all, your profit depends on the data you read correctly!

The next category that is taken into account when conducting fundamental analysis is the political situation in the issuing country of the analyzed currency. It is impossible to strictly distinguish between domestic and foreign policy:

 Surplus product must be realized outside the state, tightening of requirements to citizens (income control, taxation, etc.) will immediately lead to an outflow of labor and intellectual resources from the country, which will immediately affect production, its capitalization, the share of foreign capital in various sectors of the economy, etc.

 The manifestation of aggression in foreign policy (simply put – war) – on the contrary, triggers domestic production and scientific potential, becoming, as they now say, the driver (driving force) of the economy. Again, it is not the purpose of this publication to repeat the course of political economy and political science.


When analyzing political news, it is important to remember that all the rules of warfare apply to politics, especially foreign policy. As Sun Tzu said in The Art of War, “war is the way of deception. …”.

For us it means that politicians’ statements about strategic plans (both internal and external), about the intentions of leaders of countries and their political forces should be treated with skepticism, not to be taken on faith.

Traders and financial analysts in their forecasts always build correlations between political and economic news, always take into account history, consider similar situations in the foreseeable past – there is nothing new under the sun!

What can be singled out for analysis when considering the sphere of political news are such periodic events as presidential (head of state) elections, elections to parliament (ruling body) and other planned periodic phenomena in the political life of the country, the very fact of their presence will already be strictly correlated with the economic course of the country and directly affect its economic performance, and thus the value of the currency on the international market.

Simplifying the analysis of political news, we can pay attention to the thesis “if you do not understand why something is happening, then it happens because of money”. And this thesis is most applicable to force majeure political news, which we will discuss below.

Force majeure

Force majeure news always stands out in a separate category: their distinctive feature is their unpredictability and monstrous power of influence on the value of currency.

No matter how many ways mankind has mastered to influence the weather, the destructive power of natural hurricanes, tsunamis, earthquakes and fires cannot be overestimated!

It is easy to be convinced of this by reading media reports about such events as, for example, Hurricane Katrina (USA, 2007), earthquake in Japan (2011), forest fires in California (2016), etc.

“Industry is paralyzed…”, “Economic recovery will require …. ” Billion dollars…”. All a trader can do upon learning of such cataclysms is to immediately sell the currency of the country where it happened – a win-win long-term trade that will bring hundreds of percent to the deposit!

 Those who want to remind us about morality (say, people are dying there, and you are profiting on someone else’s grief …) – go out the door for oxygen – we live under capitalism, which means that the one who knows how to calm emotions in any situation and increase capital! As crude as it sounds, it’s true.

The most powerful and destructive events will exert the greatest pressure on the change in the price of an asset, which you should definitely use for your own well-being!

It is possible to distinguish a number of force-majeure events in the sphere of politics or economy, but here the factor of insider information will play a role: for example, such an event as the assassination of the head of state, overthrow of the existing ruling regime – only for others looks unexpected, but for the participants of the process – quite natural planned action.

 The same can be said about terrorist actions aimed, for example, at destroying the production facilities of the country’s largest oil producing enterprise, which will inevitably affect the exchange rate of the national currency.

 Remember – if you want and cannot understand the reason for what is happening – then the reason is money. Further logic will lead us to the sphere closed from the eyes of the general public – conspiracy theory, where traders and analysts do not go – everything is very shaky and often unfounded.

We, a team of professionals, apply and to increase the accuracy of forecasts, and thus to increase the profit of each transaction, we recommend using only reasonable and numerical indicators with a transparent history!

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