Fundamental bias in intraday trading

So, I have been religiously following fundamental news in the past weeks to get the feel of fundamental bias for the coming week. Last weekend all the articles and analysis from leading forex website telling me that GBP is definitely bearish for this week

Well, yesterday I found that instead of pushing down, GBP surge due to a positive update on labour cost. While I couldn’t find any indication that there will be an update on labour cost on any event calendars (or did I miss something here?). So my point is, there will be many fundamental surprises that I can’t foresee. This get me thinking, is there any benefit at all for getting fundamental bias for intraday trading? Im now practicing in trading 1H chart.

Anyone can share their experiences?

Personally I care not for fundamentals. This is especially true as an intraday trader. You trade in the here and now. What you have to be more aware of is when news gets released. Most will be at a predetermined time but then others can be because some mug twittered something dumb.

" some mug twittered something dumb." > this really represents my frustation towards fundamental.

I guess unless I’m working for big financial institution, I will not get access to all the news/fundamental events/release in real time.

Thanks for replying!

[quote=“mailotrade, post:1, topic:116805”]
This get me thinking, is there any benefit at all for getting fundamental bias for intraday trading? Im now practicing in trading 1H chart.[/quote]

There is a difference between trading based on fundamentals and trading near term news events.

A fundamental position is primarily based on an assessment of economic developments and related factors such as interest rates, inflation expectations, Central Bank policies, international trade and so on. Therefore a fundamental position is almost always long term in nature. Rarely will one news release, announcement or unexpected comment, by itself, radically change an entire long-term trend. The fundamental outlook is not just one piece of data, rather it is a constantly moving jigsaw puzzle comprising many individual pieces. But since these individual pieces can often provide conflicting data, a long term position needs to be able to absorb the resultant fluctuations in price.

If one is trading short-term then the fundament view becomes news trading, looking for the next reaction to the next piece of data - and, of course, sudden, unexpected events can easily and significantly distort this.

Some problems with fundamental views are that 1) we are trading currency pairs and so the current price is affected by events concerning either currency, 2) each currency in the pair is also affected by its relative value vis a vis other currencies, 3) economic releases are very lagging and even subject to further amendments to the previous release, 4) the market usually builds an anticipated result for forthcoming data release into the price already beforehand, 5) geopolitical and other risk factors can significantly overide the anticipated reaction to long term economic trends.

You mention a 1 Hour timeframe. In this kind of time dimension you are hardly looking at a true long-term fundamental view. It is a short-term bet on the near-term “Flavour Of The Day”. Whether a trade on this timescale is based on technical analysis or forthcoming news events is not going to make any difference if an unexpected event occurs - the price reacts the same whatever your basis for entering the trade.

When using such a short term chart as 1 hour or less, the entry and exit criteria are quite critical which suggests that a technical analysis is a good way to identify these levels more precisely. But whether traders rely 100% on TA or use it simply to confirm their underlying “fundamental” assessment is a matter of personal preference - either way, these unexpected events will always occur from time to time and we just have to live with that (sometimes they can also even work in our favour!) :wink:

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Wow… this really helps! thanks for explaining this…

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I agree that if you prefer to be an intraday trader the only thing that matters is when the news is released and how you think will affect the market. The second part you will learn it when you have very good knowledge of the background of every country.

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