 Hi, my name is Leon Rowe, currency trader and trading coach at trading180.com and in this video I'm going to show you why you should be backtesting fundamental analysis forex fundamental analysis to really Give you an edge in your trading and one of the quickest ways you can do that and If you're new to forex fundamental analysis and maybe you're not or you think that forex fundamental analysis Is a bit of mumbo jumbo is a bit of nonsense and price action is all you need to know I'm here to tell you that I strongly disagree and here are the reasons why now with obviously proof now so in at the beginning of 2022 last year I released a webinar, right you can search for this webinar Just go to my channel at the top. You got a search button and search bar and this top one here Fundamental analysis webinar three steps to generating a profitable for forex trade ideas, which is released 11 months ago But I actually recorded it maybe about a year before that maybe released this about a month or two after I actually recorded it to the public It was a private webinar and in that webinar If you click on it, I really kind of break down why in fact The the dollar was a buy and the euro was a sell, right? If you're buying the dollar on the euro dollar, then in fact your you know your directional buyer should have been short and You know that video goes into detail. So I advise you to click on that video right there Or I'll leave it in the description box below Or maybe a link at the top right hand side. There should be somewhere and You'll understand just by look watching that video and studying that video not just watch it really study it You know how and why prices did this, you know, this downtrend for about a good nine months right and Then we had this move to the upside right about from around October November All the way to where we are currently and again fundamentally, you know a lot of traders would say You know from a technical analysis perspective Well, you know, this was some sort of alien wave or you know price action tells you all but really price action follows fundamentals and so The reason for this this major move to the upside was a number of things So first of all we had fed pivot rumors fed pivot rumors If you don't know what fed pivot is basically the Fed were there were rumors that the Fed were pivoting from hiking rates To to basically holding rates, right and potentially looking to cut rates into 20 into the end of 2023 2024 and so the market started to readjust its expectations, right for rate hikes Which typically appreciates a currency to now Revalue the dollar yeah against the euro based on Rumors that the Fed are coming to the end of their hiking cycle. There was also There was also Rumors say rumors, but there was lower inflation readings, right coming in also as well, which was I guess backing up the idea of the Fed pivot rumors because if lower inflation comes in then the Fed a Less likely to actually hike rates, right and there's also recession fears The economy was contracting there were economic indicators And the market was really kind of getting ahead of itself, which it does with fundamental analysis, right? It prices in the future also going against the dollar was China's zero covid policy, which was which is actually helpful for The euro and not so much the dollar as it creates more of a risk on environment and in a risk on environment money Can flow out of the dollar into More riskier risk on assets like commodity currencies the euro the pound and a lot of emerging market emerging Yeah, emerging market currencies Euro seasonality in December typically in December the euro does rally There was a graph. I couldn't find it, but I'll probably try and find it after this video where Over the past. I think maybe 20 years the euro has You know appreciated against the dollar. I think maybe 18 17 times out of those 20 years And so there was seasonality, but and also as well talking about Seasonality there was also euro warm a winter, right which helped with energy prices So as we were going into the winter there was the thinking that if Europe have a cold winter due to issues with obviously Ukraine and Russia and Russia you know turning off the certain natural natural gas or restricting natural gas anyway It was going to be a problem in Europe in Europe. We're going to be the most affected, right? But that actually didn't occur in terms of the water the cold weather In fact, it was warm weather which meant that the economy was less reliant on on energy costs Which then helped with the economy avoiding a recession So the market has to kind of price that in and again, this is all You know being Happening in the background beyond, you know a price chart, which you know, we were aware of in the In in my trading 180 mentoring group now Backtesting how to backtest first things first thing you want to do is basically just go back through Any of my fundamental analysis video webinars see what I said and see what occurred, right? You have a year's worth of data right there I say a year's worth of data, but you've got a video that was created a Year ago, right and you can see pretty much what happened, you know a year later and so Or at least nine months later on on the update And so a lot of people tend to disregard a lot of old video old videos or older videos because they think that they It's not relevant, but with fundamental analysis. It's relevant. It's always going to be relevant. It's it's evergreen Right, it's how the markets work So whether a video was created six months ago nine months ago even three years ago When it comes to fundamental analysis as long as it's the correct fundamental analysis The data is still relevant. I'll give you an example So this is a video that I created three years ago forex fundamental analysis full course your dollar threat strategy under 60 minutes, right? And I created a video where I went through month on month right the whole of 2019 the fundamentals The basic fundamentals looking at GDP and inflation, right and the effect on interest rates again with the dollar Yeah, and month to month exactly what was happening and what was happening with price. Yes, it's a three-year-old video but the same Concepts and the way that I was approaching the market back in 2019 is exactly the same as I was using in 2022 yeah, and the same result was happening. So again, we go back to 2019 right let's go back to 2019 and I was then you'll see in that video I was talking about You know shorting the euro dollar and why you should go short in the euro dollar 2019 beginning of 2019 was here and 2020 we ended up down here the money was made right and a bigger trend was made Going short. Yeah, and by the way, I made that video probably in 2018 Also, actually, yeah, I think I made it in no, sorry. I made it in 20 2020 looking back on 2019 but for anyone who Wants to go back to 2019 in fact and go back through my discord group All the information is there from 2018 where we were looking at going short in and around here So the proof is all there the information is all there and that's really how you back test fundamentals, right? Go and look at what I was saying back at the time and see if it materialized over the medium to long term We're not talking about, you know, maybe this week, right or you know this You know this month because if we fundamental analysis you can get maybe a month or two of potential pullbacks But overall we're looking at the bigger trend the medium to long term the three to six to nine month type moves That's what we're looking at and that's how fundamentals plays out. Anyways, I hope that helps The links are in the description box below. Take care. Let me know what you think and I'll speak to you soon