Does it affect us , if they predict first, If yes… Please explain me how?
I’m a noob, still trading strictly demo accounts. I completed the School of Pipsology.
With FOREX, you are primarily doing technical analysis and working price action. You want to have at least knowledge of a fundamental event as affects your currency. Example… USD/CAD. Today Canada increased its interest rates and that announcement was made at 10:30 AM. At 10 AM on the 30M chart, USD/CAD took a nice dive. So that made for a nice 10 - 20-pip scalp trade. Knowing this is going to happen allows you to be ready for things like this. So, you can’t disregard fundamentals entirely.
On the other hand, you don’t want to spend your time reading into fundamentals or trying to be a soothsayer on how a fundamental action affects price. Example: about a month ago, the EU announced it would be stopping quantitative easing. Now, QE is supposed to be bad for a currency. So stopping it should be a good thing, right? Well, EUR/USD took a dive, because we had fundamental news of our own.
If you are scalping, or day trading fundamentals deserve about 10% - to 20% of your time - if that. These are hit-and-run trades where you’re looking to grab some pips and get out. If you are holding trades overnight - as in swing trading, or position trading, then fundamentals become much more important. You don’t want to be holding a swing trade and have a major fundamental event break out in the middle of it.
I agree with @devitor1 , if you’re scalping, you need to focus more on TA, fundamentals play a smaller role in your success in this type of trading.
A couple of thoughts from a rank newbie:-
Fundamentals drive everything ultimately (hence the name) BUT it isn’t what the fundamental does that affects the market, it’s whether it does what traders expected it to do. For example, a good CPI figure will only lift that currency if it is better than expected. A good CPI that is less than expected will most probably cause a fall in the related currency. Also, the trouble with trading in pairs is that both are affected by events, so it may be wise to choose a pair where only one currency is likely to be volatile and pair it with a presently staid one (CHF and JPY sometimes fill that bill).
Or have I got it all wrong?