How do fundamentals fit into the technicals?
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  1. #1
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    Dec 2006
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    Default How do fundamentals fit into the technicals?

    I know it's important to consider both fundamental and technical analysis but I'd like to know just how fundamentals play into the technical analysis part.

  2. #2
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    Jan 1970
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    Fundamentals are basically what makes the technicals. At the end of the day (more like month or year), the fundamentals are what dictate the price. NOT technical indicators.

  3. #3
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    Dec 2006
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    I agree to some extent. However, technicals are good for sensing when the market is overbought or oversold. Also, finding support and resistance levels give you great areas for you to find entries and exits for your trades.

  4. #4
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    Dec 2006
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    I rarely use fundamentals as a decision maker as to which direction i am going in a market. But I do use it to know when to trade and when not to trade i.e. during major news releases

  5. #5
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    Nov 2006
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    I don't use fundamentals either. Trying to understand the dozens of reports that come out every week is too much for me. I think charts tell me enough on what the overall market thinks about a report.

  6. #6
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    If you're a longer term trader/investor, then knowing how to read economic reports and knowing their effects is fundamental and success in the long term can't be achieved without it. For day traders/intraday traders fundies aren't as crucial. It's all about market pricing.

  7. #7
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    Dec 2006
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    i always thought that fundamental annoucements move the overall long turn makret significant unless there are seriouse news that keep coming week that follow along with the rise or decline of the makret. its important to watch fundamentals cause it does gives clues.

  8. #8
    Join Date
    Apr 2014
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    I would bet money this question has been ask before, maybe in another thread, but here goes anyway. Suppose you see a good trade setup on Monday but you know there is going to be economic news announcements on Thursday and you don't know what the results of the announcements will be or what effect they will have on your position. Do you stay out of the trade or you take it anyway? Right now I am holding off on any trade involving the Eur because of Greek situation. If Greece pays their debts the Eur will rise, if not the Eur will fall like a rock.

  9. #9
    Join Date
    Oct 2014
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    2,664
    Fundamentals are the engine of your car, they are what sets things in motion and provides long term movements.
    Technicals are the driver, making small adjustments to steer the car around obstacles while always keeping an eye on the indicators and dials that show the engine is working correctly.

  10. #10
    Join Date
    Nov 2011
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    Good question, some people say that TA is more important, so enter your trade using TA only, yet others say FA is the way to go, just enter on your analysis of that.

    Imo, the wiser use both, I understand your difficulty with Euro at present, specifically the Greek risk - but look at the TA, specifically the daily going back to Mar 15 on Eur/Usd and you get a sense of how the market is viewing that risk.

    Eddie is right re using TA for the specific levels, TA reflects levels that large sell/buy orders were in the past, so if price were to fall back to a specific buy level, you are a large buyer, your order(s) will move price, you want to get a large buy position on at the best possible price - well you have to take it in stages, you will not get all on first time, portions as it rises.

    The fundamental reason for your buying remains unchanged, but price falls back to your first buy order level (for whatever reason) - would you not then take the opportunity to add to your position - the TA guys call it a double bottom or support.

    Currently on Eur/Usd hr1 we have a head & shoulders, with the neckline broken - so some TA guys will say that 1140 is now resistance, as long as price is below that then it is a sell as it is now.

    NFP adds fuel to that argument - but you are correct - a Greek settlement would likely blow all that out of the water - so how to trade it? - just wait until Tue and see how the market is trading it - always the best way to learn.

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