How Fundamental Analysis Influence on Your Trade ?

When a foreign exchange market trader uses fundamental analysis, they are looking at how economic and political news information can influence the price of currencies within the market. Even though economic and political news can cause the market to fluctuate quickly for a short amount of time, generally speaking, fundamental analysis is better suited for use over a long period of time than a short one.
It is important to follow news information because even these short-term changes in the market can have a major effect, especially on day traders. If an economic speech is being given or a meeting of several countries is taking place, the market can have a very strong reaction and can have a negative or positive impact on the market, and on a trade that might have been made.
For example, you might be following a trade on the Yen but a piece of economic news has been released from Japan saying that economic predictions were not correct and that the economy has actually decreased significantly within a certain amount of time. This negative information could result in a decreasing value of the yen and that could very easily take away whatever profits you initially made from your trade. However, this initial, strong market reaction could easily disappear in a few hours and the direction of the currency will change once again.
In this kind of situation, you have to decide what the best move is. If you don’t have stop losses in place, then you have to make the difficult decision to potentially lose money by getting rid of the currency or holding onto it and hoping that your currency will rebound. If you do have a stop loss in place in order to save your capital, then you need to have a replacement trade planned out in case you do end up hitting that stop loss.
A trader needs to pay attention to both technical analysis and fundamental analysis. You should always pay attention to world events when you are setting up a trade and attempt to determine how those events could impact your trade. You can find technical models available which can attempt to predict what might happen with certain events. The goal here is to minimize your losses and decrease the impact on your trades by using the proper exit and entry points.