Opening on the news or attempted re-entry into the market on the fundamental factors

The greatest strength lies in knowledge, but also knowledge, make us weak, the challenge is how to use them correctly.

As we know the market manages a lot of various factors, each factor on its own is making those or other changes in the prices of certain values. Factors influencing the price change can be as strong or weak, may be significant in terms of usefulness, and not significant, may make deceptive, and may be true until the last minute.

And the interesting thing is that each trader in his own ability to interpret that any other figure, which in turn leads to fluctuations in the market, and in particular very often causes the so-called "market noise" before a real trend lines of market trend. Often, the trader, who successfully analyzed in advance some indicators that can significantly affect the change in market rates, should respond in advance, opening or closing their positions at the entrance or exit from the market.

Look at Figure 1:

Figure 1. schedule EURUSD, change in price in the afternoon period of time.

The above figure 1 shows the change in the price of EURUSD for the annual period of time. Each trader wanted to get this information, a year ago and make their profits, but not so easy as all it seems. Indeed, in order to have time to make a deal on the market must be at least represent the situation in the market and know what is actually happening there. The ability to anticipate the direction of movement of prices according to those or other factors will allow you to be always at altitude and get a stable income over a long period of time. Every trader is a person determines the direction of development and trade in the market, analyzes and makes a decision, making the deal and getting the profit or loss. Every trader is guided by its method of trading using technical or fundamental analysis, or even any signs to enter the market. And to argue that it is not right, none of us can, because if he gets a stable income through their methods of trade, the way in which it moves, it may be much more stable and yield a permanent profit, he or investors, where he works.

Therefore, to say that one of the bad systems of other well does not make sense, as, for example, and in programming. Programmer, through its expertise and intellectual ideas of creating a software product, guided only by its experience and methods. The product performs a series of operations of the task. And the result may be the same, although the methods of achieving the objectives were different. Quoting the example I would like you to smoothly transfer directly to the topic that we are going to consider in our scientific article.

The purpose of this article and the research does not is to show you which of the methods of analysis of markets, better technical or fundamental. Also, we are not going to condemn those who are selling, using different systems, a mixture, based on fundamental data or on technical analysis. Exploring methods of influence on the market of various factors, in particular, by finding all kinds of things enter the market or otherwise, with the analysis of signals, we would in our scientific article is to examine the fundamental factors influencing the market. Through the news, a variety of utterances of influential personalities, unpredictable events such as political conflicts, wars, terrakty, associations and other ways to influence the market.

All these indicators tend to influence the market through their ads on television, radio, news channels, through the exchange of information agencies, such as Blumberg, Reuter Tenfor and other smaller agencies. Therefore, in order to successfully trade the market is always necessary to keep abreast of recent developments in the world, even in real time, that no delay could not affect the change in bidding before you noticed it. Well, do you think is set I have a platform of news in real time and will be informed of all developments in the world. Now, I just become richer, but not as simple as you think, because if everything is to reason, then the change of course in the market would not occur, and how we could earn. It is therefore ideal for analysis of fundamental factors may not only serve as a platform for news in real time. It should be very attentive to such terms as the ability to qualitatively analyze the news fit to work and can not be strong and not much news. In other words find the news, which can obviously affect the market and set the direction of movement of prices, but also to decide on the purchase or sale of, or any other tool on the market. It is not the fact that, having received the news and knowing that she is very strong, can be very wrong on the market, opened in the opposite direction. It is in this and the hidden secret of fundamental analysis - in the correct analysis of the news and making early decisions at the entrance to the market.

In this article we wish to undertake an analysis of one week by the news impact on the market and observe how the same change of course and why it is so and not otherwise. Indeed, the most interesting thing is that you try to make sure that it is not always the course was moving there, where they tell him news. For more detailed considerations show figure 2:

Figure 2, a weekly schedule for EURUSD 16.02.2004 - 20.02.2004

Figure 2 provides a week-long period of price change pair EURUSD. As you can see, the price varied in different directions, the reasons for this could be anything. In doing so, be sure to look at picture number two, because it expressed a global trend in the general direction of the trend. Our task will be to make a thorough analysis, using the fundamentals, and in particular, how they have affected the market during the week. And also through the information obtained to draw conclusions, which is composed of a market where just hold fence, as even such a position is also active in working on the market.

Our analysis will begin from Monday. 16.02.2004. Here is a list of news that could affect the change of course on Monday:

11:12 Consumer confidence unexpectedly fell.
Washington (THE WALL STREET JOURNAL), February 15, in early February, the data suggest that consumer confidence has declined, the University of Michigan.
University Index of consumer mood fell by 10% to 93.1 from 103.8 in January.
Economists predicted that the index will rise. Despite this, the index remains well above the level of 2003, when the mood of consumers is heavily influenced by events in Iraq.
Index, tracking the mood of families with incomes below 50 000 U.S. dollars fell by 15%, whereas the mood of families with incomes above 50000 decreased by only 7%, while remaining close to the maximum.
Consumer expectations fell to 88.4 from 100.1, while the index tracking consumer attitudes to the current economic situation fell from 109.5 to 100.4.

Make the conclusion in the case of lowering the index of consumer confidence likely to change the dollar, that is, weaken, therefore, should grow a pair EURUSD.

Now take a look at the image of currency quotes for this time period Figure 3:

Figure 3, the point of release news and the subsequent change of course.

As shown in the figure, as expected, there was little change in prices, but the next day the price has risen significantly. We continue our analysis, to understand, not that there was a further cause of price change.

Tuesday 17.02.2004, set out some interesting news that could affect the market: 13:21 ECB: variational marginal rate refi 2,00%. It seems that this figure was taken into account in advance. Pay attention to the figure 4:

Figure 4, prior change in price before news on the refi.

The figure shows that before you were published, our data, the market reacted, and the subsequent motion of no response, which in turn can lead to confusion, at the opening position, and in the worst case and a loss. Each of these figures are given specifically so that you can visually pronablyudat change course.

Wednesday 18.02.2004:
16:33 U.S.: The number of homes under construction in January of 1.193 million against 1.181 million in December
16:32 U.S.: Construction of new housing construction in January declined by 8% to 1.90 million
16:31 U.S.: the start of construction of new homes in January, -7.9%, at 1.903 million
16:31 U.S.: Completed construction of housing in January, -2.3% to 1.709 million against 1.749 million in December

Now see how the course has changed in this period of time, Figure 5:

Looking at the data and obtain the result through changes in prices can be assumed that in this case the price change began, just after it was announced in the states, after 16.00 Moscow time. Overall, the data released by the U.S., has played against the latter, which in turn reflects the fact that the dollar must fall, as such, and consequently rate should go up, but it did not happen.

Thursday 19.02.2004:
14:04 euro area: trade surplus in 2003 to E72.5 billion compared with E98.9 billion in 2002
14:03 euro: exports in December, seasonally adjusted +0.1% m / m and imports -1.6% m / m
14:01 euro area: the importation of 4 quarter milliardovevro 246.7, +2.2% to 241.2 billion euros for 3 months
14:01 euro area: a surplus auction. balance of E17.4 billion, -25.3% Pr 3 Apt. + E23.3 billion
14:01 euro area: a surplus auction. Balance at December * E5.7 billion Ave December 2003 E6.9 billion
14:00 euro area: the export of 4 sq. km. 264.2 billion euros, -0.1% to 3 square meters. E264.5 billion
16:32 U.S.: The number receiving unemployment benefits 106,000, at 3.186
16:32 U.S.: primary application reviewed 11, 000 to 368,000 in the week prior to February 7 (pr 363 000)
16:32 U.S.: Number of applications for unemployment benefit for 4 weeks rose by 250 to 352,000
16:31 U.S.: The number of applications for unemployment benefits without taking into account seasonal variations -92.263 million

Now look at Figure 6:

As can be seen even after the above data, no change. You can interpret it so that the data were not very strong or as if by force data released in the U.S. balance data released in Europe. But this is all very superficial, so at this stage is yet to draw attention to the fact of change or not change the price of the course.

Friday 19.02.2004:
16:35 U.S.: Consumer price index in January: health +0.2% +0.2% medicine, medical services +0.3%
16:34 U.S.: Consumer price index in January: Education +0.5% +0.6% paid training, communications equipment -0.3%
16:33 U.S. CPI in January: Gasoline +7.2% (without taking into account seasonal variations +10.5%), electricity +0.6%
16:32 U.S. CPI in January: Tobacco +0.6%, other goods and services +0.3%
16:32 U.S. CPI in January: Food without changes, CPI excluding. Food +0.5%, -3.3% vegetables
16:31 U.S.: Consumer price index for energy +4.7% in January, food prices at the same level
16:31 U.S. CPI in January, gasoline +8.1% (without taking into account seasonal variations +7.0%)
16:30 U.S.: Consumer Price Index in January, +0.5%, core +0.2%;
16:30 U.S.: Consumer Price Index in January for new vehicles -0.1%
16:27 U.S. (projected): The index of consumer prices for energy rises
16:26 U.S. (projected): The index of consumer prices in January: +0.3%, core +0.1%

Look at Figure 7:

As can be seen on the news announced, we have only data on the U.S. economy. As you can see the positive data, which should indicate an increase in the U.S. currency to European, as a consequence we are seeing prices fall on this interval, ranging from four hours to Moscow time.
Once you get an idea of how there is a change in course by the news it could be argued that we can not guarantee 100% of the specific direction of the price through the data, which will be published in the news. Because the market can accommodate the data in advance, which in turn could lead to a fall, a sharp, either sideways price corridor. Therefore, to properly learn how to enter the market must always be borne in mind the fundamental data. Here is the method of work, taking into account the news of data:
1.Izuchite Calendar News for the whole week ahead.
2.Vydelite the most powerful news in your opinion that the market is looking forward to.
3.Prosledite yet this news in a positive way or negative.
4.V if the global trend of rising, and some time has been allocated to short-term correction of birth when the correction to stop.
5.Posle a correction is beginning to veer in the direction of a global trend, and the fundamental data contribute to its strengthening, and forecasts indicate continuing trends from the global trend.

Once these conditions have been met, you can enter the market, exposing the foot, in the case of rollback. The values of the foot need to be chosen by "the price of noise" that did not happen accidentally closing on foot. After you have successfully logged to monitor how the market will change through out the basic data, if all goes according to plan, then gradually add a few lots in case of failure is to move the stop-loss at bezubytok and close with minimal losses, while analyze the reasons for foot operation.

A good trend you!

President and Managing the international hedge fund
AlMaz Hedge Fund Management
Alexander M. Mazurkevich