After some responses from other questions I got thinking,
We get trends occuring around 15% to 20% of the time, One of the famous noob questions is: How can we tell if its going to be a range or a trend before it happens?
Normally the answer is we cant and use good money management but I wonder???
A trend happens when one currency finds strength against a weaker currency, It is not a random phenomena it happens for good reasons.
So is the key to finding these trends before they happen fundamental analysis?
If I am being honest I wouldn’t have a clue where to find the past news so I would really like to hear if anyone has success using fundamental analysis to find trends or am I barking up the wrong tree here?
One thing I do know, If we look at the EUR/USD it has been in a uptrend since December 2016.
In November Trump got elected as President and Europe had some good news around the time.
Is that possible what caused a uptrend?
I identify the market trend based on daily support and resistant levels, I seem news analysis is important for the long term trading! I don’t know how to convert news’s as a market trend!
it is true that trends occur for good reason
it is also true that the Market’s are manipulated.
so Factor into your calculations the following…
when you watch the news and read reports and you decide that, let’s say you want to BUY EURUSD
well… the market makers KNOW THIS
so… as yourself this
if they just blindly followed with the trend without manipulation and gave you what you want
how long do you think they would be in business for hehe
there is also another trend that must be respected
that being that 95+% of traders MUST LOSE
so ask yourself this then…
if you assess the market and you decide you will buy
but, the 95% also agree with you
what do you think the market makers do ?
Just let everyone have the cash and enjoy the gravy train to becoming a millionaire… hell no
ANSWER : Psychological Manipulation
so… don’t fall for it
if your decision is correct it will pan out
the only difference will be… WILL YOU BE CONVINCED TO DROP YOUR TRADE or to stay out
they use your greed against you
Fundamental news impact for long term maybe influenced to urrency, but if we always follow news update, especially on calendar economy, there are so various news and often also cause to currency being move rapidly, I think also depending market participant whether news fundamental giving good or bad impact to currency.
An idea of where central bank interest rates are and which direction they are heading for the respective currencies is useful, such as Central Banks Interest Rates - Investing.com.
This isn’t something that should drive a trade, but if considering being, say, short against a currency that has a relatively high interest rate which is possibly subject to being raised, there needs to be a very strong justification.
But bear in mind that GDP and inflation can be moving for some time in a particular currency area before the relevant central bank feels the need to changes rates.
I just read a book by Ed Ponsi that went into some detail about Fundamental trading.
I had a look at the NZD v Majors since the interest rate for New Zealand is currently higher than the others.
The last rate decision caused a reversal in a few pairs but little effect on others.
From doing some research I can see its maybe a usefull tool and a good understanding will be useful but its not the difference between being a trader and demo’er
Fundmental analysis is not a method for finding trends.
It might be a method for predicting trends.
But only in expert hands.
Here’s how I look at it: when you’re learning to trade and getting practice in a live market, whether you like it or not, you’re up against the world’s best, most experienced and most successful traders, and in a very real sense you’re competing directly or at least indirectly against them. That’s not as bad as it sounds, because on the plus side you get to choose on what basis and with what tools you’re going to compete with them.
The main choice is the one between fundamental analysis and technical analysis.
This isn’t the place to list all the advantages and possibilities and prospects for technical analysis for the beginning trader, but it’s a good place to clarify what a huge mistake it would be to choose fundamental analysis. You can’t compete with experts, that way. They’re always faster and better informed than you are. And they have research departments full of professional analysts earning high 6-figures salaries to make sure they stay that way.
So for the most part, forget it.
That’s my approach, anyway.
It’s also the approach of every other self-employed or “retail” trader I’ve ever known who’s achieved any success worth mentioning. That tells me something worth knowing.
FA trends just like TA.
You mentioned back at end of last year and the trend change on Eur/Usd.
There was more to it than the new President, there was also the ECB.
IN October 2016 Draghi hinted that the ECB would possibly taper:
“An abrupt end to bond purchases? I think it’s unlikely.” Market took to mean not an abrupt end - I.e taper.
This was seen and reported as a hint - he further commented that the bank would wait until Dec, when asked why then he said we have to wait for more info.
Then in Dec this:
Further reported here - note the reference to J Weidmann:
A scene was unfolding, right at holiday time, plenty to digest for back to work in Jan.
Worth noting the hierarchal in FA - the central bank is primary, so comments, attitudes of cb’ers can set a trend (sentiment) in motion, - for example check out the upcoming new Fed chairman.
A couple of years ago a poster on BP commented one of the safest trades known to any trader, it was CHF, trade direction was underpinned by the SNB, he mentioned that you cannot possibly go wrong with a CB behind your trade.
Check what happened when the CB pulled the plug - wiped out large and small alike.