You remind me of myself.
Swing, position trading
Patience in the market
Look. In my mind, that’s fascinating stuff. I mean, it’s all macroeconomics.
I’ve noticed this about myself from the beginning (7 yrs in now).
But, when it comes to trading, you kind of have to separate some wheat from the chaff, so to speak. The market moves. And the best way to think about why it moves can be boiled down to being either from technical reasons or fundamental reasons. There is a third reason. It’s called sentimental.
How I’ve come to reconcile this, is by way of figuring it all out by yourself.
I know that’s probably not what you want to hear. Sorry. But think of it. Technicals run the market, it seems, anything from the daily time frame and lower. So, if you trade anything around the daily time frames, you’re gonna have to adopt some of the technical indicators to get you in and out of trades. Right?
But there shouldn’t be a reason why you couldn’t have eye out for what the fundamentals are up to. It’s kind of like you have to do your own research. Like, find out what are the most important fundamental factors, for each currency, that’ll have a direct correlation on how the currency will move. This is some of the things I’ve figured out (in the way of much reading).
- Interest rate differentials
- Central bank forward guidance
- The country’s bond yields
- The perceived sentiment of each country (current events)
Those are some of the things I keep a keen eye on. But, you have to remember what we’re all doing here in the first place.
Forex is nothing but sizing up one country’s currency against another, right? It’s the supply and demand between 2 of them. And whichever one is in more demand, usually is the one in which will appreciate over the other. So basically, you kind of have to put it all together and make sense of it. A lot of technical traders will say that all you have to do is read the charts and it’ll tell you everything you need to know. Which, by the way, is true.
But, you have to remember who moves the market. And what are they thinking. From what I’ve come to learn, is this. The central bankers are moving the currencies. Also, big institutions whose world revolves around moving their (big) money around. They have their reasons. And I don’t think it’s all purely speculative. I believe there are intelligent minds, with intelligent reasons behind their money. Their not dummies. This is what they do for a living. Right?
Well, with all that nonsense, I’ll just leave you with this. This is my favorite place to go to for some good fundamental data on each of the countries.
With a lot of reading, research, and study you can educate yourself on what’s truly important, in regards to the reasons behind what’s really moving the market. Just keep in mind the time frames. The shorter trends will stem from technical reasons. The longer trends will stem from fundamental reasons.
Try researching what this means. The smart money. I believe that’s who we want to follow (the big fish). This is probably the thing I’m always wondering about when I am looking at the charts. What’s the smart money trying to do? Surely they are not the one’s who are setting traps, stop hunting, playing games, all over the place…etc.
Well Andressa, these are a lot of things I think about.
You know what I do, sometimes? I’ll go on tradingeconomics and just compare a whole bunch of data between 2 country’s. It’s fascinating stuff. You can really get to know a country by looking at where their money goes to. Is there more money coming in to the country or going out? Who knows how to balance their budgets? How well off are the citizens (per capita stuff)? Things like that.
Well, that stuff might not relate to trading, but you can ask other more pertinent questions, maybe.
Hope this helps some.