• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint

Subjectivity

It would be a costly mistake to view fundamental trading as predictable—as if currency movements were a mechanical response to an action. This is simply not the case in Forex. Just because Great Britain's GDP increases and the U.S. GDP decreases doesn't mean that the GBP/USD will increase in value.

After all, the importance of information is subjective, depending on who is receiving and interpreting it. Since fundamentals are factual and transparent, all participants have an equal opportunity to analyze information. It's various interpretations of the same information that creates market volatility. Market psychology and behavior, predictions of fundamental changes, perceptions, and what data has already been discounted all become factors in fundamental trading. It is this complexity that throws off new Forex traders and drives them to become technical traders.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint