 Hi, my name is Leo Monroe, Covenancy Trader and Trading Coach at trading180.com and in this video I'm going to answer the question as to can you trade forex fundamentals with any strategy, a technical strategy and I've been getting a few questions on this and a few queries, I guess and I thought I'd just address it in a video So Before I really get to the answer. I mean the answer is is yes and no, but there are things that you could that you have to Be very very aware of before trading with certain strategies and applying fundamentals to certain strategies, so first things first is really what is fundamental analysis and it's really fundamental analysis is How to determine value whether something an asset or an exchange rate in terms of forex Is a potential bargain? Or fair value or expensive, right? That's all fundamental analysis is Fundamentally, you're you're understanding what drives Value price and value with two different things. Yes, a lot people getting confused You know in terms of price price doesn't always reflect value and value doesn't or isn't always reflected in price If it was then nothing would ever be cheaper expensive because it would be the price The price would reflect the value, but there are you know, there are the assets that are bargains and error assets that are expensive, right? We know that You know just from Understanding value right but in some reason online in you know in in the social media space for some reason that you know Fundamental, you know analysis doesn't apply to forex, you know a lot of traders would have you believe which is absolutely nonsense It applies to everything else. It applies to stocks. It can apply to bonds. It can apply to crypto currency It can apply to property you can apply to, you know, toothpaste. You can apply to anything. Yeah, but it doesn't apply to Forex, which is you know, very strange, but I'm here to tell you that it does now if we understand a fundamental analysis It's just understanding value and value is not always reflected on price Then we can kind of at least get to grips with How we should kind of trade and apply certain technical strategies or your technical strategies So one of the things that I would always suggest is to be spatially aware. Yeah, spatially aware and what I mean by that is that Technically a lot of traders will you know, just look at levels of Support and resistance, right? So they will come in and they will see a level They will go down to like a five-minute level or five-minute time frame And then they will see a level a couple of levels and go all right thing. Yep I want to be a buyer, you know, right here. Yeah, because I've just seen that this is Support term resistance resistance term support whatever it is that you want to call it and I want to be a buyer right there let's say but let's For example, you zoom out right and let's say on the daily time frame chart Yeah, it's you're actually Buying yeah Around this area here. Let's say you're buying at potential highs. So this Five-minute chart. Yeah The location of that is somewhere up here on a daily chart. So this would be the daily and it should be the five minute Now you could want to get long on a on a on a currency, right? Whatever that currency may be because you maybe you understand, you know, fundamentally the you know, you have a certain bias, right? But does that mean that you should really be buying at the highs on a daily time frame chart? And this is where traders will end up typically going wrong. It's because they you know, they get the direction, right? Yeah, in terms of all right I want to be a buyer of one currency over another because I've watched you know Many of Leon's videos and this is what he says to to you know, how to apply fundamental analysis So I want to be long this currency pair, but I'm gonna zoom down into the five-minute time frame chart and So I'm gonna start to buy at every single, you know Five-minute supply zone or five-minute support level, right? That is not it Right and when I say spatially aware You you need to understand that on a daily time frame chart you're buying at an expensive area This is you know, objectively expensive in terms of when you look back on what prices have done Yeah, this could have been a move of, you know A couple of hundred pips pull back of a couple of hundred pips and a move of a couple of hundred pips And you're trying to get involved and buy at highs. Yeah The cliche and the mantra as true as it might be a cliche is to buy low and sell high. Yeah, you know many Day traders will just you know buy randomly looking at an intraday, you know just intraday levels when ultimately Fundamental analysis and understanding value. You should understand that this is expensive. Yeah, and That you need a pullback Right You will need a pullback in order for you to be to for this to be a bargain, right? So as prices start to pull back Yeah into you know, let's say for example this zone here, right? I don't really trade, you know Supporting resistance in in the way that I'm showing you now But just for example say let's say, you know, your strategy is trading support and resistance. Yeah You want to wait for that pullback on a daily time frame then enter into a You know, maybe a five ten minute hourly chart and then look for intraday trades because you know From being spatially aware and understanding value. Yeah that you're not buying expensive area In fact you're buying on a pullback, which may be some sort of fair value, right? Or at least it's cheaper than it was buying at the high. Yeah so Yes, you can trade with fundamentals you can you know have a fundamental bias which typically doesn't really change too often In the way that you know, we trade trick and fundamentals are Trading 180 It's very rare that you'll go from, you know day to day week to week Saying oh, I want to be a buyer with this and then next week I'm gonna be a seller of that and in the following week you want to be a buyer of that, right? And same thing with months. We don't necessarily go month to month, you know Buying the euro then selling the euro then buying the euro typically we You know when once we have a fundamental bias on a currency pair or not because you know Not all currencies are buyers or sells right, but there are times where when you once you we identify value right and where You know which currency you want to be buying and selling Those currencies and that trade idea can last four months so we can have a bias To maybe for example short the euro dollar, which we had have had over the past 18 months And just literally short the euro and buy the dollar, right? So it's not something that you know Again, this is misconstrued. I think online and maybe just or maybe not even misconstrued It might it might just be a case of how other traders understand how to how they trade fundamental analysis But in the way that we trade fundamental analysis at trading 180 our bias Can typically last for you know a very long time And it's no real real reason to change it It's just a case of just maintaining and reading up on you know If anything has changed as long as nothing has changed then we just keep you know buying on dips now You know that when it comes to you know selecting interday levels and being spatially aware Yeah, that those are the really the two main reasons As to why traders Don't trade fundamental analysis or don't understand and also as well another thing would be for example You know, I get the question why don't you just trade it on the way down? Well, that's not really how You know to trade to trade, you know as far as you know buying going higher, right? Let's you know going long and then going against your fundamental and bias on the way down I mean you could do that But then what's the point in using fundamental analysis, right? You might as well just stick to technical analysis if you want to try to you know buy at heart, you know Pick turning points continual, you know, whereas the to the upside or to the downside, but we know You know from brokers who basically published their results every I think it's every month or two And they say that pretty much something like 70 to 80 percent of traders. Yeah, are Are losing traders, right and don't make any money And that's their statistics. Yeah, so, you know, on their trading platforms, you look at the disclaimer Most traders, you know a typically trading what technical analysis, you know it because if you go on YouTube and you look at the Ratio of fundamental analysis videos that get views like mine in comparison to technical analysis videos You know people want the easy technical analysis, you know simple You know strategy in order to make, you know lots of money Those are the videos that get, you know hundreds of thousands of views fundamental analysis for for, you know People typically is a is a is too much hard work and also as well, you know, you've got a you know It's not really, you know taught in the way that it should be as well, which again is not the traders fault because You know, they don't know any better. But the point being is that If you want to try and go long and short, yeah 70 to 80 percent of traders Lose money. So it's you know, I found it easier to apply fundamental analysis And if prices are coming back against fundamental analysis to look at any pullbacks is just buying opportunities It makes, you know, all the sense in the world to take profit at Expensive areas, you know partial profits full profits and then just wait for pullback down into, you know A zone where you think there's gonna be another bargain, right around here or wherever it is, right? If that doesn't work out then caught doesn't work out then you just look for another level, right? This would really be where I'd be looking at which is a which would be a demand zone And then you look for area there, right as long as the fundamentals haven't changed and resentment is on your side Then that makes all the sense in the world. So With that being said Banks are tactical as well, right? So Just going off of you know Looking at because one of the things that we do at trading 180 is we confirm our fundamental bias with several banks loads of banks matter of fact, I say loads, but maybe about 10 11 12 banks On a regular basis one of them being a city bank and they were you know, they produce a report Quite regularly and so what banks will do is They will use Language in terms of they will go long and short, but they would use the word tactically, right? So what they will have is maybe an overall position to get short on a currency pair Like their main position might be to say I then will will continue to short the euro dollar But what they may do is they may go tactically long Yeah At certain areas tactically means in the short term And it's against their overall buyer said that they can obviously maybe take advantage of potential pullbacks potential profit taking etc But their overall, you know, main position Will be fundamental position will be to the short side, but a lot of times they will They will say they are tactically long on You know on a currency to maybe just take advantage of a potential small pullback now What's going to say on this? I can't remember saying this. Yeah, that was it also as well One of the things is a bit of a tip right that you can use in terms of understanding You know where you are spatially funded not necessarily fundamentally, but you know from a value perspective and it's to do with the What traders would know as the moving average, right moving average is actually moving fair value Yeah, and what I mean by that is that an average or a mean Is you know the the the average between you know a high and a low point, right? And that would be the mean or the average if or cheap Yeah, so a high would be depending on which you're buying is the base currency or the quote currency or cheap Right, so if you're buying for example, you know dollar yen Yeah, dolly and then a high is going to be expensive Yeah, and a pullback and a low is going to be cheap if you think that you would be a buyer of the dollar if you're buying the euro Yeah over the dollar. Well, sorry if you're buying the dollar Still over the euro and you want to be a buyer of the euro then actually a high Yeah, it's going to be a cheap price. Yeah, because you're actually shorting to get to buy the euro. I'm sorry to buy the dollar and A low is actually going to be expensive because you're buying You know the quote currency, which means in order to buy it. Yeah, you need to actually do the opposite Yeah, so with that being said Going back to Moving averages if you take change the language of what a moving average is in terms of value Yeah What the moving average is saying to you is that or let's say for example a 21 period moving average Is actually telling you that over and on the daily chart 21 bars or 21 days That is the fair value of price So if I was to press for example this one month tab down at the bottom left Yeah, it's going to give me price action from this high to this low and what this moving fair value and this is by the way the EMA the exponential moving average and the SMA the simple moving average or what I'd like to you know time Moving fair value, right? So 20 so this is the daily 21 day moving fair value, right both EMA and SMA and why the 21 because there are 21 This is a 21 days trading days in a month. So in fact I actually do refer it to in you know, the trading 180 term terminology is the monthly Moving fair value, right? So this is telling you what price, you know, the fair value of price over the past month Yeah, if you take that high and that low Currently fair value. Yeah, it's between 10046 and 10030 on the euro dollar exchange rate Yeah, we've taken into account The high and the low and what price has done over that month. So anything above fair value should be seen as Cheap or getting cheaper because what comes beyond what goes beyond fair value, right? If this is a bargain and this is expensive 50% between Expensive in the bargain would be considered fair value And anything below fair value starts to become what more of a bargain It's exactly the same thing with moving averages, right or white again term to be moving fair value So any trades that set up below The monthly moving fair value Personally, I don't get interested in I'm not interested in It's only when I see price go above the monthly moving fair value is when I start to get interested in Setups and that makes, you know, perfect sense when you consider You know fundamental analysis. Yeah, and understanding Value now banks will again as I said before they will might tactically go long or short, right? There's various different, you know You know, they say tactically sell, you know on on on strength, right? for the for the for the for the pound and there's some other ones as well Just this is just city bank, but But the point being is that banks can go long right to make some short-term money Overall, their main position will be short and I'm more focused on Understanding their main position rather than where they trying to get long or short tactically Yeah in the in the short term and they've got their reasons for obviously, you know going along and short These are the most clever, you know people some of those clever people on the planet, right? But If you can filter out Yeah, trying to capture every single move and just look at their main positions And where they are then trading becomes a lot easier Obviously have a bit more patience With that because there are periods of time where you have to wait for these pullbacks, right? And that might not you know happen for maybe a week or two But we're not only just trading one pair, you know, I'm not anywhere I'm playing trading multiple pairs So there's usually a trade somewhere At least once or twice a week As we wait for a pullbacks depending on obviously the currency pairs that we're looking to trade and sometimes there isn't any trades Right for that week as prices do pull back and depends on what we're looking at fundamentally But the point is is that? It's really understanding value. It's really understanding where you should be trading With your strategy if you're using any, you know, technical analysis strategy I use three technical analysis strategies in combination. So I use a daily supply and demand something called capture pain relief as well as stop hunts and I apply those strategies with With the fundamentals and that just gives me my bias and then I'm just eliminating any trade That goes against that bias as far as I'm not I'm ignoring any setups that go against my bias So even if I see a fantastic trade, you know CPR trade, but it's a but it's against my bias I'm not going to take it based off of technicals. I'm taking my bias based off of, you know, the fundamentals and That's that so if you do and are interested in You know learning about the fundamental analysis side of things I do have a discord group. It is a subscription based and Enrollment will end on the 11th of September. I might open up again Maybe towards the end of the year. I haven't really decided yet, but you can just if you do want to trade your own strategies That's fine. You can you don't have to go through my technical analysis strategy So you've got the supply and demand trading course here. You've got capture pain relief trading You've got stop hunt manipulation course and then you've got fundamental analysis as well So you've got all the fundamental analysis data spreadsheet, etc access to and then You can really you know get into You know how we trade fundamental analysis and apply that to you know certain things to your to your technical Analysis as well as we have our fundamental analysis You know bank resources bank research and up-to-date fundamentals on each of the Countries as well as gold and silver commodities government bonds, etc. So I Hope that clarifies You know trading fundamental analysis with strategies short answer is you can but just be aware of these These factors and don't try not to buy at highs Or sell at lows be spatially aware Understand where value is By you know, one of the ways you can do that is not only looking at daily daily zones And daily areas daily highs But also by looking at you know the monthly moving fair value and applying that to your to your charts Anyways, I hope that helps if you have any questions You can email me at info at trading 180 comm until the next video take care and wish you all the best