Hey guys!
I’m just a little curious about how similar FX technical analysis is to stock market technical analysis. I have no want to leave the forex but if I for some reason wanted to trade stocks, how much would I have to change my strategy?
I would imagine that maybe fundamental is more important, but I’m not sure.
Thanks.
Generally speaking, TA can be applied similarly across markets. There may be some minor variations in specific indicators or parameters, but that’s about it.
Hello,
Yeh, well, let me ‘throw my name away’ again. Technical Analysis ‘means’ more in the trading of Equity Futures and Commodities than it does in Spot FOREX Trading. Simple as that. And far be it for me to disagree with John (‘rhodytrader’) but I’ve proved this beyond ANY doubt (forget about ‘reasonable’ doubt)!!!
Regards,
Dale.
Thanks for the replies. I would have expected that fundemental would gain more importance and technical would have lost some because it seems like there would be a lot more people buying stocks to invest rather than speculate.
Hi,
Only a pleasure.
My reply to you have been ‘bugging’ me since yesterday i.e. I need to ‘qualify’ it I think. Technical Analysis ‘means’ EVEN MORE when trading the Stock Indices (Dow, S&P 500, NASDAQ, etc.). Traders (on the Floor) watch very carefully certain Moving Averages (normally 50-day, 100-day, and 200-day) and where a particular index CLOSES after a trading session. Trading individual stocks is risky UNLESS you’re able to analyse financial statements and really ‘dig in’ to the company and make a veritable study of the stock. Individual stocks are far too prone to sudden changes in direction when even the slightest bit of news (information) is released so that’s something to be aware of. But you can take ANY TA tool (Fibs, Pivots, Trend Lines, you name it) and they will ‘behave’ accordingly. Also, and if you’re going to trade fundamentally, there is just SOOO much information out there on, for example, commodities (stuff like weather patterns and how that’s going affect a ‘soft’ like Sugar or Corn etc.). This type of ‘cold hard information’ is NOT available for Spot FOREX. At best: you have the COT Reports (and there’s an always ongoing debate at to how useful they really are) and some or the other analysts ‘prediction’ (and mostly none of them never agree anyway)!!! LOL!!! But market conditions right now are difficult no matter what you’re trading. As some fund manager noted on Bloomberg TV the other day: we’re currently not ‘trading the markets’ we’re ‘trading politics’ and it’s almost ‘impossible to do’. That’s why trading volume at the NYSE is at record (comparatively) low volumes at the moment and most of the spikes in volume this year have been selling volume. Basically: it is thought that investors are sitting in cash right now and these rallies to the upside are without ‘vigour’ or strength. Once again: you just don’t have this kind of information ‘at your fingertips’ when trading Spot FOREX.
OBVIOUSLY: I don’t trade Spot FOREX (in light of the above) so my opinions are biased to say the least. But for the most part: the above is ‘statement of fact’. So it’s up to you what you trade. Also, and just so that you don’t think I’m some TA ‘guru’, I trade mechanical technical trading systems which IS INDEED different from technical analysis (although I’ve been known, on occasion, to use TA tools like Fibs and Pivots but they don’t form a major portion of my ‘trading regimen’). And, of course, the above is a personal opinion, based only on the fact that in nearly six years of trading I’ve never made a single USD (overall) trading Spot FOREX and yet, using the same mechanical technical trading systems, I’m profitable (overall) trading CFDs on Equity Futures and Commodities. Same trader, same mechanical technical trading systems, same broker, different results between Spot FOREX and Equity Futures and Commodities. Go figure!!! I’ll not bore you with the details as to WHY i.e. it’s got me into ‘hot water’ MORE than once over here. But I sort of ‘stick around’ here because I’ve got some good ‘mates’ and have (I believe) a lot to offer ASIDE from discussing ‘Spot FOREX particulars’ if that makes sense.
Whichever way you ‘go’: I wish you well.
Regards,
Dale.
Dale, given the the [I]bond[/I] guys who sit near me regularly talk about key technical levels in EUR/USD or USD/JPY or the USD Index, as well as those in the S&P and rates, I don’t think you can make the statement the TA is more meaningful in stocks. In fact, I’d suggest that FX is a more technically driven market than others because of the macro nature of the fundamentals.
Hello,
Well: we cannot agree on EVERYTHING to start with. And secondly: you’re surrounded by experts or ‘gurus’ which I’m not. So you’re probably right i.e. I should not have posted as ‘dogmatically’ as I did. Maybe it’s just because of ‘where I’m at’ and what I ‘follow’. Very seldom on Bloomberg TV (for example) are key technical levels for Spot FOREX pairs even noted (and that’s my ‘connection’ to the ‘outside world’ as it were) but there sure are a lot of key technical levels discussed for Oil, Gold, and, of course, my beloved indices!!! LOL!!!
As I’ve noted before: fundamentals and me are not a good ‘combo’ ANYWAY (and from what I gather the ‘fundamental gurus’ on Bloomberg TV ‘suffer’ the same ‘shortcoming’)!!! LOL!!! But I guess, maybe, with equities, BOTH apply (I’m always the one that ‘bangs on’ about ‘market sentiment’ and ‘real people’ behind equity trading so maybe I’m contradicting myself to a degree here).
Regards,
Dale.
Technical Analysis is just a way to interpret the market using charts and patters. As long as you have chart, then you can apply technical analysis. Therefore, FX technical analysis is similar to stock market technical analysis.