The Ultimate Fundamental Trading Course for Beginners (In Under 26 Minutes...)

Summary

This educational video offers an in-depth exploration of macroeconomics and its impact on trading, focusing on key economic indicators like GDP, inflation, labor market, and retail sales. It emphasizes the importance of understanding these factors for successful trading, and how they influence asset values and price movements. The presenter also discusses the role of central banks, interest rates, and geopolitical events, providing practical tools like a free ebook and a spreadsheet for viewers to enhance their trading strategies.

Takeaways

• 📈 Macroeconomics and fundamentals are crucial for understanding the overall economic performance and how it affects asset values and price movements in trading.
• 🌟 The presenter offers three funded trading challenges to engage viewers and encourages participation by commenting, subscribing, and liking the video.
• 💼 A helicopter view of the economy is necessary to grasp macroeconomics, focusing on broad economic indicators rather than individual businesses or people.
• 📊 GDP (Gross Domestic Product) is a key indicator of economic health, with positive growth suggesting a strong economy and negative growth potentially indicating a recession.
• 💰 Inflation rates, as measured by CPI (Consumer Price Index) and PPI (Producer Price Index), are important for understanding the cost of goods and services and how they impact the economy.
• 🛍️ Retail sales and consumer spending are vital for gauging economic activity, as confident consumers contribute to a thriving economy.
• 🏦 Central banks play a significant role in managing economic stability through monetary policies, such as adjusting interest rates and implementing quantitative easing.
• 📉 Economic indicators like GDP, inflation, labor market conditions, and retail sales should be considered collectively to form a comprehensive view of an economy's performance.
• 🔗 Interest rates are a tool used by central banks to control inflation and stimulate economic growth, with higher rates typically attracting foreign investment and lower rates aiming to boost consumer spending.
• ⚠️ Geopolitical events and financial crises can significantly impact financial markets, leading to uncertainty and shifts in investor behavior towards safer assets.

Q & A

What is the main focus of the video on fundamental trading?

The video focuses on understanding macroeconomics and its key components that drive the value of assets being traded and how they translate into price movements on charts.

What does the term 'macroeconomics' refer to in the context of trading?

In trading, 'macroeconomics' refers to the broad economic performance of an economy, looking at the overall health and trends rather than focusing on individual businesses or sectors.

Why is it important for traders to understand the labor force in an economy?

Understanding the labor force is important because it's a significant part of the economy. Traders look at job additions, unemployment rates, and wage levels to gauge the strength and direction of the economy.

How does inflation affect the economy and trading?

Inflation, which is the rate at which prices of goods and services are rising, can indicate a 'hot' economy with high consumer spending. However, high inflation can also lead to decreased purchasing power and may prompt central banks to adjust interest rates, affecting currency values and investment decisions.

What role do retail sales play in the economy as discussed in the video?

Retail sales are a measure of consumer spending, which is a key driver of economic growth. Healthy retail sales suggest a confident consumer base, stimulating the economy and potentially leading to higher asset values.

What is the significance of GDP in understanding an economy's performance?

GDP, or Gross Domestic Product, is a measure of an economy's overall performance. Positive GDP growth indicates an expanding economy, while negative growth can signal a recession, influencing asset values and investment strategies.

How do central banks influence the economy and trading through interest rates?

Central banks can influence the economy by adjusting interest rates. Higher interest rates can cool down inflation and attract foreign investment, while lower rates can stimulate spending and economic growth, impacting currency values and investment decisions.

What is the purpose of quantitative easing as mentioned in the video?

Quantitative easing is a monetary policy tool used by central banks to stimulate the economy by increasing the money supply, typically by purchasing government securities or other securities from the market, aiming to lower interest rates and encourage lending and spending.

How can geopolitical events impact financial markets and trading?

Geopolitical events, such as wars or conflicts, can create uncertainty in financial markets, leading to a sell-off in riskier assets and a flight to safe havens like gold or stable currencies. This can result in significant market volatility and shifts in asset prices.

What strategies can traders use to incorporate fundamental analysis into their trading?

Traders can use strategies like supply and demand analysis, focusing on economic indicators and central bank policies to identify trends and potential entry points for trades. They can also look for economic and monetary policy divergences to formulate a fundamental theme that guides their trading decisions.

Outlines

00:00

📈 Introduction to Mastering Fundamental Trading

The speaker welcomes viewers to a video on mastering fundamental trading, emphasizing the importance of understanding macroeconomics for successful trading. The video promises to simplify complex economic concepts for everyday understanding. The speaker announces a giveaway of three funded trading challenges and encourages viewers to engage with the video by commenting, subscribing, and liking. The focus is on macroeconomic indicators that drive asset values and their translation into price movements on charts. The video aims to provide a comprehensive view of the economy, rather than focusing on individual businesses or people.

05:02

🌟 Understanding Macroeconomics and Fundamentals

This section delves into the definition of macroeconomics, which involves examining the overall economic performance. The speaker uses the analogy of a helicopter view to describe the broad perspective needed to understand macroeconomics. Key components include economic growth or contraction, labor force dynamics such as employment and unemployment rates, wage levels, and inflation. The speaker also introduces the concept of retail sales as a measure of consumer spending and its impact on the economy. The video aims to connect these macroeconomic factors to asset values, such as stocks and currencies, and how they are reflected in market movements.

10:02

📊 Key Economic Indicators: GDP, Inflation, and Labor Market

The speaker discusses the significance of GDP as a measure of an economy's overall performance, with positive GDP growth indicating expansion and negative growth suggesting contraction or recession. Inflation is explored through the Consumer Price Index (CPI) and Producer Price Index (PPI), highlighting how rising prices can signal a 'hot' economy. The labor market's health is assessed through employment change, unemployment rates, and wage growth, all of which are crucial for a robust economy. The video emphasizes the interconnectedness of these indicators and their collective impact on asset valuation.

15:04

💼 The Impact of Central Bank Policies on Economic Indicators

This part of the video explains the role of central banks in managing economic stability through monetary policy, particularly interest rates. The speaker outlines how higher interest rates can cool inflation and attract foreign investment, while lower rates aim to stimulate spending and economic growth. The concept of quantitative easing is introduced as a tool to inject money into the economy during downturns. The video also touches on the effects of geopolitical events and financial crises on market sentiment and asset prices, with a focus on safe-haven assets like gold and stable currencies.

20:05

🚀 Linking Commodity Markets to Economic Fundamentals

The speaker connects commodity markets, specifically gold and oil, to broader economic conditions. Gold is presented as a safe-haven asset that benefits from inflation and uncertainty, while oil prices are sensitive to global economic health and demand. The video discusses how economic downturns can reduce oil demand and prices, and how central banks respond to crises by adjusting monetary policy. The speaker emphasizes the importance of understanding these relationships for formulating trading strategies.

25:06

📚 Developing a Macro-Inspired Trading Strategy

The final section of the video provides guidance on developing a trading strategy based on macroeconomic analysis. The speaker suggests using a spreadsheet to track economic data and formulate views on asset movements. The video introduces the concept of economic and monetary policy divergences as opportunities for trading, and the speaker shares a preference for supply and demand trading strategies. The video concludes with a reminder to engage with the content, join the community, and apply the learnings to trading practices.

Keywords

💡Macroeconomics

Macroeconomics refers to the study of the economy as a whole, focusing on broad economic indicators and their impact on the overall economic system. In the video, the speaker emphasizes the importance of understanding macroeconomics for traders to make informed decisions. It's about viewing the economy from a 'helicopter view' to grasp the big picture, which includes factors like economic growth, inflation, and labor market conditions.

💡Fundamentals

In the context of trading, 'fundamentals' refers to the underlying economic, financial, and statistical data that influence the supply and demand for an asset. The video discusses how understanding fundamentals is crucial for traders to assess the value and potential price movements of assets like stocks or currencies. It's about looking at the core components driving the economy and how they translate into price movements on trading charts.

💡GDP (Gross Domestic Product)

GDP measures the total value of goods and services produced over a specific period within a country's borders. The video explains that GDP is a key indicator of an economy's health, with positive GDP growth suggesting an expanding economy and negative growth potentially signaling a recession. It's used to gauge the overall economic performance and is a critical factor in fundamental analysis for traders.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. The speaker in the video discusses how inflation affects the economy and is monitored through indices like the Consumer Price Index (CPI) and Producer Price Index (PPI). High inflation can indicate a 'hot' economy, while falling inflation or deflation can signal economic contraction.

💡Labor Market

The labor market encompasses all working individuals and their employment status within an economy. The video highlights the significance of the labor market in fundamental analysis, focusing on employment change, unemployment rate, and wage growth. A strong labor market with low unemployment and high wages typically indicates a healthy economy, which can positively influence asset values.

💡Retail Sales

Retail sales represent the total receipts from the sale of goods and services by retail businesses to ultimate consumers. In the video, retail sales are mentioned as an indicator of consumer spending, which is a key driver of economic growth. High retail sales can suggest a confident consumer base and a thriving economy, impacting the value of related assets.

💡Currency

Currency, in the context of the video, refers to the money used in a particular country or region for transactions and is a type of asset that traders deal with. The speaker explains how economic performance, such as GDP growth and inflation, can affect a currency's value relative to its peers. For instance, a strong economy might lead to a stronger currency, impacting foreign investment and trade.

💡Interest Rates

Interest rates are the cost of borrowing money and the return on savings and investments. The video discusses how central banks adjust interest rates to control inflation and stimulate economic growth. Higher interest rates can attract foreign investment, while lower rates might be used to stimulate spending in a sluggish economy. Interest rates are a critical tool in monetary policy and significantly impact financial markets.

💡Central Bank

A central bank is the main monetary authority of a country, responsible for formulating and implementing monetary policy. In the video, central banks are depicted as key players in managing economic conditions through tools like interest rates and quantitative easing. The actions of central banks, such as the Federal Reserve in the United States, can create fundamental themes for traders by influencing currency values and economic stability.

💡Quantitative Easing

Quantitative easing is a monetary policy in which a central bank purchases government securities or other securities from the market to increase the money supply and encourage lending and investment. The video describes it as a method used by central banks to stimulate economic activity during downturns by 'printing money' and injecting it into the economy, which can initially lead to a decrease in currency value due to the increased supply.

💡Safe Haven Assets

Safe haven assets are investments that are perceived to be immune to the fluctuations of market volatility and are sought after during times of economic or political uncertainty. The video mentions gold and certain currencies like the Japanese Yen, Swiss Franc, and US Dollar as safe havens. These assets tend to retain or increase their value while riskier assets may underperform, making them attractive to investors looking to mitigate risk.

Highlights

Understanding macroeconomics is crucial for fundamental trading as it affects asset values and price movements.

Macroeconomics involves looking at the economy's overall performance rather than focusing on individual entities.

Economic growth, expansion, or contraction can be indicators of the health of an economy.

Labor force analysis includes employment change, unemployment rate, and wage levels.

Inflation rates are important for understanding the rise in prices of goods and services.

Retail sales are indicative of consumer spending and economic stimulation.

Gross Domestic Product (GDP) readings reflect the overall economic performance.

Back-to-back negative GDP readings may signal a technical recession.

Inflation is measured by the Consumer Price Index (CPI) and Producer Price Index (PPI).

Deflation, where prices fall, can indicate a less sound economy.

A strong labor market with job additions and low unemployment rates is beneficial for the economy.

Central banks play a role in maintaining economic and price stability through monetary policy.

Interest rates are adjusted by central banks based on economic growth and inflation.

Quantitative easing is a central bank action to stimulate the economy by injecting money.

Geopolitical events and financial crises can cause market uncertainty and affect asset prices.

Safe haven assets like gold and certain currencies may gain during times of crisis.

Commodity markets, such as gold and oil, are influenced by the global economic climate.

Developing a macro-inspired trading strategy involves analyzing economic data points and central bank actions.

Fundamental analysis can be combined with technical analysis to formulate trading strategies.

Transcripts

welcome to your first step of mastering

the art of fundamental trading in this

video we're going to dive deep into

macroeconomics understanding all the key

and core components that are driving the

assets that you are trading in terms of

their value and how that translates on

the charts with price movements don't

worry I make this super simple for the

everyday person to understand but all of

this is key and must not be overlooked

if you want to really level up your

trading game to add to this excitement

I'm going to be giving away three funded

sft challenges so what I want you to do

is make sure you comment below this

video why are you excited to learn about

fundamentals make sure you hit that

subscribe button and give this video a

like without further Ado I hope you're

ready have your notebooks at hand and

let's jump straight into this so what

exactly are macroeconomics and

fundamentals well we're looking at the

economic performance as a whole imagine

being in a helicopter and you have that

view over the economy we're not focusing

on just one individual or One Singular

business we're looking at the general

big picture of the economy now when

we're looking at things we want to

understand are we seeing a decent amount

of growth is the economy in expansionary

territory where we're growing growing

growing things are looking amazing or

are we in contraction territory where

the economy is shrinking things aren't

in a great place we also want to

understand the labor force because the

labor force makes a big part of the

economy do we have a decent amount of

jobs being added is the unemployment

rate low are wages high and then of

course we want to look at inflation what

at what rate are prices of goods and

services Rising because if they're

Rising rising Rising typically speaking

we have a hot economy an economy that's

solid because people are out spending

their money so of course prices of goods

and services are going to rise or are we

in a period of where inflation is

falling and instead we're getting

deflation where prices are coming down

down down in an economy which isn't so

sound and we also want to understand of

course the retail sales retail sales is

General consumer spending a consumers

outspending their money stimulating the

economy there's a host of things that

are really important to understand and

put a value on an economy and then of

course it's relating assets such as the

stock market or it's relating currency

if we're looking at the UK economy we

want to understand how growth is how the

economy is performing because that puts

a value on the pound versus its peers so

there's a number of things to look at

which we're going to dive deep into into

this video in further detail now before

we progress further in this video what

I've done for you is I've created an

free ebook which goes into detail of all

the points that we have covered today so

you can refer back to once you finish

watching this video now what you need to

do is join the Discord the fundamental

trading Club Discord via the link in

this description key indicators and

their relevance now we touched upon some

of the core components that make up of

that bigger picture of the economy but

let's dive into those in a little bit

more detail starting off with number one

GDP which is gross domestic product when

we're looking at GDP it's giving us an

idea of how the economy is performing as

a whole are we seeing that growth and

expansionary economy that means positive

numbers and we can get GDP readings on a

month-to-month quarter on quarter or

year-on-year basis or do we have

negative readings minus which means the

economy is Contracting now when we have

backto back negative numbers that means

we have a potential recession a

technical recession for an economy now

it's really important that we look at

GDP because if for example we have such

as the latter that I just mentioned

where we get back-to-back negative

readings contractions a technical

recession this is going to decrease the

value of Assets in that relating economy

so if for example the UK is in a

technical recession in comparison to its

peers then the value of the indices

stocks are going to come down the value

of the pound potentially also going to

come down relative to its peers and that

will turn off Foreign investment now

remember as well with economies foreign

invest

coming into an economy makes a big part

of potentially trying to boost things

okay trying to boost output economies

rely heavily on foreign investment

coming in so never neglect GDP readings

number two inflation so this is the rate

of which prices of goods and services

are rising so when we have an economy

that's running hot people of course are

out shopping spending their money now if

all these people out shopping and

spending their money what do you think

these businesses that are offering these

goods and services doing because there's

such high demand they're going to be

putting up their prices so when we have

a lot of spending going on a good and

healthy and happy consumer prices of

goods and services are typically On The

Rise that we have a heating economy to

get an idea of where inflation's at in

an economy we must look at the such as

CPI which is Consumer Price Index this

gives us an idea of General prices of

goods and services for everyday

consumption such as your general food

energy bills all of that and then we

have ppis which is producers prices

index now with the ppis these are the

costs for the producers of the goods and

services that are going out to the

consumers so are their prices rising

because of course if their prices are

rising they're going to be passing that

on to the consumer as well and then

we're it's going to be contributing to

overall inflation rising in an economy

now we have inflation but then we also

have deflation where prices of goods and

services are falling falling falling so

drastically where consumers are not

outspending consumers are reluctant

they're sitting on their hands perhaps

because the labor market isn't great

wages are low and if people are

reluctant to spend money then of course

this isn't stimulating the economy so

prices are going down and potentially we

could have deflation negative prices

where they just continue to fall because

we have not got a bustling and a warm

economy we've got actually a cool

economy now with all of that decreased

stimulation because people aren't

outspending and those prices are coming

down what we could have is contraction

in growth negative growth as I explained

before with recession now where we have

low

growth and also low prices that is a

really bad place to be for an economy

Japan historically suffered with that

where they had deflation and they were

trying to bring up inflationary levels

because consumers were just reluctant to

want to spend their money number three

the labor market now there's various

components that we observe on this front

starting off with employment change or

jobs being added to the economy if we've

got a decent amount of employment change

a plus figure a positive one where jobs

are being added this is a very

encouraging sign this is great for an

economy because it means we have more

potential people coming into the labor

force it means more people are out

stimulating for these businesses

stimulating as a whole for the economy

and then we also want to look at the

unemployment rate we want typically

speaking for a sound economy for the

unemployment rate to be low less people

unemployed less people claiming

unemployment benefits and that means

more people that are in the workforce

again stimulating the economy we also

want to look at earnings wages what are

people actually getting paid for all

this work that they're doing because if

people are getting paid more money and

wages are on the rise they have more

disposable income to go out and shop

consumer spending spend spend spend

steal stimulate the economy help it grow

the overall output and of course with

all that spending going on as we

mentioned before with inflation prices

of goods and services on on a rise so if

we have a bustling labor market again

this is great for the relating currency

and great for indices as well and number

four retail sales and consumer spending

with retail sales it gives us an

indication of how retailers are

performing and this is important at the

end of the day because it goes back to

the consumer again if we have a health

economic environment we have a confident

consumer we have people that are getting

paid decent money people are going to be

outs spending okay they're going to be

spending spending spending this is great

for the retailers their sales are going

up because the consumer's happy the

consumer's healthy and we have a

bustling economy now with all these key

economic indicators it's really

important that we don't just focus on

one area remember I mentioned at the

start of the video helicopter view view

the bigger picture we want to understand

all those key components across GDP in

inflation the labor market retail sales

so that we can have a view as to whether

the relating assets such as the currency

or the indices are going to be on the

rise or falling one thing that helped me

with this in my early days was I had a

spreadsheet now for you again this is

going to be in the Discord so check the

link in this description to join the

fundamental trading club and this

resource will be there for you

essentially you have a spreadsheet where

for example you can have one column for

the pound one column for the dollar for

Euro Aussie andz dcad so on and so forth

whatever currencies you want now in the

columns as well we're going to have the

economies relating GDP we're going to

have their labor market figures what a

central bank is doing which we're going

to get on to retail sales inflation all

of this so that we can form a bigger

view of how one economy is performing

versus the other because of course that

difference is going to create a big gap

when we're trading right whether it's

trading GBP versus dollar whether we're

trading Euro versus the dollar so we're

looking at the bigger picture so that we

can formulate a view on where the assets

are going to be moving interest rates

and Central Bank policies what exactly

is a central bank and their role well a

central bank is a ruling authority of an

economy they will have the goal and

Mandate of ensuring economic and price

stability so they will conduct monetary

policy action on the back of how an

economy is performing so let's start off

with interest rates if we have an

economy that is growing we're seeing

decent growth

strong labor market good consumer

spending inflation is on the rise

typically speaking in this environment

we will have higher interest rates now

with higher interest rates that

typically means that the relating

currency to say for example in the

United States we have what's known as

the Federal Reserve they are the Central

Bank of the United States if inflation

is on the rise rising Rising because

we're seeing decent growth people out

spending their money they will then need

to have a higher interest rate

environment the reason being is when we

have high interest rates we're also

going to be potentially trying to cool

down inflation because we don't want

inflation running too high because that

causes a problem for the economy then it

means people's affordability is going to

start to diminish if prices and Rises of

goods and services are rising too fast

so then the central bank will raise

interest rates because remember when

we're raising interest rates we're

raising the costs of the general

consumer so for example on our mortgages

on our loans any outstanding credit card

balances the interest that's paid on

that debt Rises so then as a consumer

we're going to be more reluctant to want

to spend our money okay we're not going

to want to spend so much so naturally if

we're spending less that means inflation

should start to come down prices of

goods and services should start to come

down tying in with less consumer

spending in environment of higher

interest rates this is bullish for a

relating currenty

why because it attracts foreign

investment remember it's the interest

that foreign investors earn so if we

have an economy or a central bank such

as the Federal Reserve in the United

States they're raising rates to try and

cool down inflation or raising rates in

an environment of a heating economy keep

an economy that's overheating it's going

to attract foreign investment coming in

because these foreign investors are

seeking the highest interest that they

can earn on their Investments the

highest yield so that's going to attract

foreign investment coming in and then

how do we actually invest in that

economy as I've given with the example

with the Federal Reserve we need dollars

so they may be a foreign investor in

Japan or in Europe or in the UK they

will need to sell their relating

currency so we'll see weakness and

demand for that currency and then

inflows into the United States they have

to exchange their currency into dollars

so the demand for dollar will pick up on

the other hand if we have an economy

that isn't performing so well we have

low growth labor market isn't great

inflation's coming down then a central

bank look to take action in the form of

cutting interest rates so when they're

cutting interest rates remember they're

going to be lowering the cost for us

they're going to be lowering the costs

uh the interest that we are paying on

our outstanding debt mortgages credit

cards loans all of that to try and free

up some more cash for the consumer so

that the consumer will want to go out

and try and spend and try and stimulate

the economy again to try and prevent it

from further Contracting because if we

go out and we start spending our money

again we're going to be stimulating the

economy and then eventually that

inflation that's been falling that

contrac that's been contraction that's

been happening in the economy should

start to pick up some Pace again as the

central bank has then lowered our cost

but on the flip side remember this will

turn off Foreign investment potentially

so if a central bank is slashing

interest rates we could see weakness in

that relating currency because foreign

investors will then start to take their

money out we'll see an unwinding of them

initially coming in to invest in the

economy unwinding and trying to go and

seek where central banks are keeping

their rates higher another action that a

central bank takes in times of an

economy isn't performing so well is

what's known as quantitative easing so

they are effectively trying to print

money pump money into the economy to try

and stimulate things again now they can

do this through various operations where

where we do have that economic downturn

we could get a credit crunch essentially

a credit crunch is where lenders are

reluctant to want to lend money because

of this faltering environment they don't

want to uh go and give out money to cons

consumers in case they they don't get it

back so what a central bank does is they

conduct these operations where they

effectively encourage the banks to lend

they say look take this money we are

giving you this facility we don't expect

you to rush to pay us back we don't

expect you to pay us High interest on

this this is effectively free money for

you to go and obviously then charge a

small interest to the consumer so that

the consumer then goes and borrows from

that financial institution and then what

do you think the consumer then does with

that money that they've borrowed they

then going and spend and they're going

to spend spend spend try and stimulate

the economy now when a central bank is

conducting that action yes it is good

for the economy in the run to come but

initially we may see weakness in that

relating currency cuz remember we are

effectively flooding the markets with

say the case of the Federal Reserve

conducting this quantitative easing

we're effectively printing money and

flooding the markets with dollars so if

we have all that flooding of the market

with dollarss imagine we have so so much

of a float of something so much of of

something building up the value of it is

going to come down it's diluting the

value of the currency so keep that in

your mind as well when a central bank is

conducting quantitative easing now

before we progress further this video I

hope you're all taking forough notes

because fundamentals are extremely vast

but they can be conquered and they will

level up the entirety of your trading

game now obviously I am stuck within

time constraints of this video so what I

have if you check the link in this

description I have a fall in depth

fundamental CA where I break everything

down it's extremely simplified and it's

going to help you be able to translate

this information on the charts and what

it all means we've got various

strategies in there of trading

fundamentals with technicals it has

amazing reviews from the community so if

you're interested in really going into

serious amount of detail simplified but

effective you can check that link in

this description GE political events and

financial and economic crisis now there

are times when these events occur and

they can have big impact on the markets

let's start off with geopolitical we've

seen in the past where Russia invaded

Ukraine this sparked a war between

Russia and Ukraine now with war and

geopolitical tension brings uncertainty

to the financial markets now when we

have uncertainty markets are less

inclined investors are less inclined to

want to invest in riskier assets such as

stock so we will typically see the stock

market selling off in times of war and

instead flights into to Safe Haven so

flows money flows into Safe Haven assets

such as gold gold is deemed a safe haven

asset a safe haven commodity where

people put their money in times of

uncertainty whether that be geopolitical

or whether that be a financial and

economic crisis it's seen as a safe

haven because it holds value during

Market turbulence and then we have safe

haven currencies your likes of your

Japanese Yen reason why that's a safe

haven currency because Japan has been

sort of economically and politically

stable for many years nothing too

drastic happening as such for Japan so

the JPY has been one to put your money

into in times of uncertainty you see JPY

strengthening during geopolitical

tensions or financial economic crisis

same as a Swiss frank the Switzerland is

a sable economy and has been so for many

years and of course the US dollar the US

dollar at the end of the day is attached

to the largest economy in the world is

the reserve currency of the world and is

also a safe haven so during these

periods we will see flights into safe

havens and weakness into riskier assets

when it comes to a financial and

economic crisis where essentially we've

had these huge economic

downturns economies are crashing

essentially financial institutions are

crashing uh consumers are losing jobs

out of work there just no stimulation

happening or stimulating of an economy

we've got a potential recession and this

is where we refer back to central banks

needing to step in and take action in

these environments like slashing rates

and pumping money into the economy to

try and stimulate things again we saw it

with the pandemic with covid where this

pandemic forced economic shutdowns

completely peep borders were closed

logistically uh things were just not

happening everything was just at a

massive standstill so this was affecting

not just individual countries but on a

global level this was impacting e

economic growth and causing large

contractions where we were seeing these

massive downturns in economies and

central banks were having to really ramp

up their effort to try and prop the

economies up again now it's really

important that we take note of signs of

a financial crisis or an economic crisis

because we need to be aware of how are

we're going to position ourselves are we

going to be looking to capitalize on

that in the front of shorting indices

because during those periods indices are

getting hit hard as a riskier assets or

are we going to be putting our bets and

our trade ideas into gold because gold

should start trending to the upside in

on the back of these events and these

crisis or general safe havens as well

commodity markets such as gold and oil

they are largely influenced by the

overall economy let's take a look at

gold for example we mentioned earlier

how gold is deemed as a safe haven it

benefits and thrives in times of

uncertainties with geopolitical tensions

financial crisis economic crisis but

it's also a great

beneficiary of inflation if inflation is

rising drastically of prices of goods

and services globally across the board

gold is a great hedge against inflation

why because where we have inflation

price of goods and services Rising so

drastically for any grien economy say

for example in the United States your

dollar doesn't go as far as it should

because prices of goods and services are

rising so much so your dollar doesn't go

as far it loses that value in in essence

because these costs of these goods and

services are high so gold is a good

hedge against that currency erosion so

during those periods people will put

their money into gold as a safe haven as

a hedge against those periods of high

inflation oil now there are a lot of

components that make up of the oil

Market but let's look at some of the key

points firstly with oil oil is extremely

sensitive to global economy how well

it's doing because if an economy or

economies in general are not doing well

the demand for oil tends to come down

okay the demand for oil comes down and

then prices also fall we saw for example

in the pandemic during covid it's also

very important just before I get onto

this point to look at which countries

which economies are huge consumers of

oil okay who are massive oil importers

so going back to my point with covid

where we had the economic shutdowns and

remember Co started off was reported

started off in China China are the

world's largest oil impor they are a

heavy consumer of oil so when China shut

down what do you think happened to the

oil Market what do you think happened to

oil prices oil prices fell actually they

crash we saw huge selling for the oil

Market because essentially China shut

down their borders you know logistically

people were not moving the economy

economy wasn't moving so there was less

demand for one the world or the world's

huge oil importer so prices fell so oil

is extremely sensitive to economic

conditions if we are in a period of

economic downturn typically speaking we

should see oil prices fall if we're in

Period of economic growth demand for oil

should be higher so prices will rise and

just to round up on oil it's important

to note the correlating currencies with

oil market for example we have Canada

Canada are a major oil exporter so a lot

of Canada's income their revenue comes

from oil sales so if for example we have

oil Market is in a great place oil

prices are rising that is good for the

Canadian economy that is good for Canada

so essentially we have more income for

Canada and the value of the Canadian

dollar should rise but on the flip side

if the oil Market is in a down turn you

know demand isn't great price are

falling then that's going to have a

potentially negative impact on the

Canadian dollar so watch that

correlation as well with oil and other

commodity linked currencies putting it

all together to develop a macro inspired

strategy now we've gone over a lot of

the key Concepts that make up

fundamental analysis understanding all

those key economic data points so that

you can formulate a view the helicopter

view on an economy as a whole because

that's going to dictate the value of the

relating assets whether that be the

currency or the stock markets and then

of course depending on how the the

economy is performing a central bank is

going to be conducting necessary actions

to ensure economic and price stability

so with all of these they provide

opportunities when you refer back to as

I mentioned before about that

spreadsheet remember Link in the

description to join a Discord to gain

access to full eBook PDF and the

spreadsheet to help you analyze

fundamentals but remember we're

formulating a view so if we're looking

at GBP versus dollar we're understanding

economically how is the UK performing

how is that going to influence the pound

and then the same thing for the dollar

how is the United States performing

economically and you're weighing and

both up we want to see if we have an

economic Divergence and of course also a

monetary policy Divergence because if

the bank of England are a period of

raising rates and the FC are not they're

keeping rates unchanged or if anything

are looking to lower rates first before

the bank of England there's a monetary

policy Divergence so that will create an

opportunity for you that will create

what's known as a fundamental theme

interest rate differentials there

because it will give the Pound The Edge

over the dollar economically and on a

monetary policy level and that presents

opportunities that presents Trends in

the market so if you're in line with

such trends like this right where we

have economic and monetary policy

divergences you can incorporate that

into your trading strategy now there's

various strategies that you can trade

fundamentals with I go into serious

detail in my inep fundamental CA of the

link in the description uh I like to

trade supply and demand Bally one of my

main strategies with fundamentals I'm

looking at those key zones marking up

those big zones where we're looking for

buyers to come into play uh demand zones

and also Supply zones where we're

looking those sellers come into play so

I'm looking if we're in a trending

Market I've got my fundamental trend for

whatever reason my fundamental theme I'm

then also looking to tie that in with

the supply and demand Zone if we're in

if we've got a fundamental theme that's

driving GBP dollar as an example to the

upside then I'm looking at my zones to

see how we're going to be working Zone

to Zone to the upside there for my entry

so my fundamentals give me the view give

me a strong bias of where GBP should be

going versus the dollar and in my

technicals give me my entry okay so

there's a lot to cover there as I said

we're we're in time constraints but

there is an in-depth course as a

reminder make sure that you comment

below this video you hit that subscribe

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