Fundamental & Technical Analysis. 50/50? What is the optimal balance trading forex pairs?

Hello community.

I’m trying to get an idea of the general balance between technical and fundamental analysis. I’m a newbie but hear me out if possible.

Based on what I’ve learned here and my warped memory of certain topics as the brain does, there are (spare me, its my level of knowledge) 3 ways of analysing the market , technical analysis, fundamental analysis and sentiment analysis. Sentiment analysis is out my scope right now as a beginner so I’m focusing on technical and fundamental.

In order to trade, you need to see the charts, you need to have a reason to trade right? I used to be the guy trying to find the golden indicator no one has ever found that will make me the most successful trader ever. It may exist but guys, I did not find it. It was looking for atleast 1-2 years. Save yourself the time , effort and frustration and just go through the course here, it’ll give you 1000* the worth of any ‘magic’ indicator we think we will find.

On the other hand I’ve been the guy looking on the outcome of every financial news event. For example a country ( I’m talking about a specific country from memory but don’t wanna bash any countries in any way so wont say which ) had 3-4 negative economic calendar accountments, market moved bullish hard for like 2 mins? then went straight in other direction :S ?

I’ve seen it happen a lot, its as if people (like me) see the news, make entries thinking yep, this is a sure thing, only for it to reverse and (probably like me) are about to blame the broker/forex on a whole/ karma /insert big bank when really its probably that psychology/sentiment part of trading taking place that we are not even aware of.

I’ve seen 80/20, 60/40 , 100/0, 0/100, 33/33/33 , from various sources.*

Technical analysis left/Fundamental analysis right

So I would like to present this question to the OG’s.
What do YOU recommend as the correct balance for fundamental/ technical analysis.

Once I’ve established a base here, my next topic will include sentimental analysis (which I suspect is the most important based on the nature of peer to peer systems & the nature of the discussed methods excluding automated and central players).

I hope I’ve made sense, and I hope there’s lots of interesting information here, thank you in advance.

Hi, very interesting post which deserves several responses. My very short and simple contribution is as follows:

In our current Covid 19 global environment, uncertainty is King. Which means it affects most aspects of our lives. Hence fundmental media reports on global economies, Covid tragedies and political conflict tensions have more influence as to how, why and when market sentiment reaction in the short term would drive prices up or down or any which way.

IMO, supply and demand zones are the best indicator for current times, albeit a lagging response to the above. Get a handle on that, though, and it would increase the probability of identifying good trades.

I’m trading long-term off daily charts, though I look over the weeklies each week to check price momentum and to help gauge the differing strengths of different trends. I don’t ever look at any economic news. If the news is good for a currency its price will rise, if its bad for a currency its price will fall: either way I will see this and this fact goes into my TA. If price doesn’t react to news it just wasn’t important.

1 Like

Once you find yourself looking at the charts and drawing lines, channels, triangles etc all over the place with the obligatory oscillators to booth, I likes to thinks that’s good enough technical trading, as long as you know what you’re doing.

If you’re looking at the calendar everyday, waiting for economic events with high impact before you trade, you’re fooling yourself.

I’m pretty sure you’ve been told fundamental analysis should be none of your business as a retail trader. Leave that to CNBC & Bloomberg.