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Fundamental Based Forex Trading
In recent weeks we have written about conservative and aggressive Forex trading, strategic trading and profitable tactics for trading online, and technical Forex trading. Previously we talked about trading BRICS currencies, the currencies of the emerging nation economies of Brazil, Russia, India, and China. While one may choose to trade major currencies with the use of technical Forex trading, the decision to trade the BRICs or other emerging nation currencies often has more to do with fundamentals. Fundamental based Forex trading is more adapted to the longer term than is technical trading.
Fundamentals of the Colombian Peso versus the US Dollar in 2012
As an example of fundamental based Forex trading, those interested in fundamental based Forex trading would have spotted the rise in value of the Colombian peso versus the dollar early in 2012. They would have consulted fundamentals and found that Colombia is coming out a prolonged period of civil unrest. The economy is starting to boom and a free trade agreement is now in place with the USA. Fundamental based Forex trading would have predicted that the peso would continue to rise throughout 2012, which it did. It would also have indicated that Colombia would probably start buying dollars to keep the price of the peso from going up to far, which they did.