Here’s the problem when people trade FX, stocks many of them use TA so they add in these indicators like fib lines, support etc. The problem is they develop a math mentality to it and in math there are fixed rules to almost everything. Take say a math question where they want you to meaure something like something x distance and x degrees from point A. There is only going to be one answer to such a question. It’s not going to be an estimate but a fixed answer.
The problem is people then use the math type of mentality when trading FX like when they draw fib lines and expect price to retrace exactly off the trend line when in reality it does seem that price could or wouldn’t do it.
I believe that FA is also needed but the problem is how to use it. The calendar in this site and on FF well how would it apply to other currency pairs not included.
You’re competing against everything that is not a retail trader with the sole purpose of taking your money. The only mathematical fixed answer you have and the rest of us have is to measure risk to your trading capital. Everything else is based on the balance of probabilities. In order to try and have the balance of probabilities on your side in the long term, you have to use strict discipline and patience. Just like math, patience and discipline can be learned and sharpened by practice.
On to the trading method. There is no one answer; there is only balance of probabilities. You want as many on your side as you can get. Technical Analysis. One of the best ways, [B]“Not The Only Way” [/B] is to have a trading method strategy that addresses the Trend, Momentum, Cycle, Support and Resistance. Depending on your trading goal, the 5 parts will have different emphasis as well as different ways to analise them. For example Trend: you could draw trend lines, or trend channels, or counting candles or just plain price movement etc. Your goal should be how you address the trend as much as over the long term how to put the balance of probabilities that you will have the trend more right than wrong. For example in my trading I use moving averages, others will use something different. The goal to get it right more than wrong and have the patience and discipline to stick to your analysis and tweak where needed. The same goes for Momentum, Cycle Support and Resistance.
Fundamentals. Again no one way to canalize use as no one way is always right or wrong. Again the only thing you can measure is risk to your account balance, patience and discipline. I trade fundamentals by waiting until all the current 24 hour announcements are posted and see what’s coming up in the next 24 hours and I trade in between. Others canalize the different announcements and put weight to them.
Over time you will find what works best for you and as you gain the experience your aim at the balance of probabilities gets better. But your first priority is to always protect your account balance by starting with measuring your risk; everything comes after that, no matter what aids you need to assist you. Hope that helps
Gp
I get what you mean! Sometimes I base my trades mostly on technicals that my entries tend to be too conservative when I’m waiting for an exact bounce off a Fib level or trend line… that I sometimes end up missing the entire trend. I guess fundamentals is mostly about determining the direction but technical analysis gives you a better view of probabilities and the price levels that other traders are likely watching as well, enough to give those a self-fulfilling characteristic as support or resistance.