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The Importance of Fundamental Analysis & Fundamental Analysis Software

According to many fundamental analysts, fundamental analysis is a time-consuming process. In fact, in the 90s, when computers and automation started becoming common tools, the analysis approach’s popularity began to dwindle. To keep up with the fast-paced demands of the foreign exchange market in the modern world, the traditional method seemed like it needed to go. However, since its usefulness remains, tech-savvy fundamental analysts determined a way to improve the elaborate analysis approach; they designed fundamental analysis software.

Fundamental Analysis 101

Fundamental analysis refers to the state of the forex market with regard to the overall economic conditions; it gives light to factors such as economic production, interest rates, employment, and GDP (or Gross Domestic Product). Its findings are based on data that comes from historical and present-day reports. As the process revolves around the evaluation of market performance, it adheres to the primary goal of yielding informative predictions.

Typical Features of Fundamental Analysis Software

An advantage of the employment of fundamental analysis software is that it addresses the fact that the forex market can be an extremely volatile market; it comes with a myriad of useful features to give light to market volatility. With its design, accomplishing basic and advanced fundamental analysis procedures is possible.

Features include:

  • Automatic order execution – also called OCO (or One Cancels Other) or OCA (or One Cancels All); it allows the placement of 2 orders (i.e. a sell limit order and a buy limit order) and automatically cancels one after an initial order execution
  • Back-testing methods – enables forex traders to attempt their odds in a hypothetical market; traders can test the usefulness of strategies and algorithms
  • Built-in and custom trading strategies – includes validated trading strategies, as well as those that are in need of trader input
  • Data feed – includes a variety of data feeds; it enables the benefits of relying on real–time data, delayed data, and EOD (or End of Day) data
  • Informers – includes regarding the availability of significant economic data

Calendar as a Fundamental Analyst’s Tool

An important component of fundamental analysis software is its feature of a forex calendar. It can provide necessary details regarding events, time, previous, expected, and actual currency values, as well as influenced currencies. It enables a trader to perform analysis according to a selected time zone; particularly, it privileges a trader to peek at a list of upcoming economic events, which ultimately rewards him with the opportunity of strategizing prior to his entry in the forex market.

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