Were they or were they not watching news feeds and other data inputs besides a price chart…? Obviously they have access to more powerful tools besides CNN, it’s still in essence the same thing… It doesn’t change the fact their attention is WAAAAY less occupied with what price is doing and WAAAY more occupied with where price should be going based on global information flow…
And yes I can and do derive information from publicly made reports… Central bank monetary policy is the number mover of currency rates for most currencies, and this policy is based on meeting certain growth or inflation targets. These targets are usually publicly expressed by the central banks. If the RBAs inflation target is 2%, and an economic release comes out suggesting inflation is significantly higher then that, the market is going to begin pricing out a chance for an cash rate cut… If this scenario occurred a few weeks before a RBA rate statement where many were preparing for cut, you are going to see a strong re adjustment in expectations, which will be reflected by a stronger currency… By the way, one could begin expecting a higher inflation report BEFORE its release by looking at other metrics available to get in the trade even earlier, a country’s credit card transaction report, retail sales, and other similar reports indicate what direction the inflation release will likely go…
This is just one example of how fundamentals can dictate the charts… Macro economic conditions aren’t a hidden mystery nor do they change over night… BTW, the market is not made entirely of traders like you and me who dictate where price should go based on patterns and levels of support and resistance… If that were the case then only looking at technical analysis makes sense… A huge portion of the forex market volume comes from transactions that don’t have the primary purpose of making money from rates moving up or down… i.e. they dont care if if price is making a butterfly gartly double top judas swing whatever, they are going to make their transaction regardless and it will have its affect on the market… Businesses importing and exporting internationally is a HUGE driver of the market, you don’t know what trade flows are doing based of charts…
Anyways, if nothing else… Realize that there is more out there that can give you a big advantage… All I’m trying to say.
I am by no means saying you can trade with technical analysis… I’m saying establish bias, direction and magnitude by fundamentals… THEN go to your charts and find your entry by whatever pattern you like…
Fundamentals have their place in sound Trading… they just do not NEED to be in there at the core premise to Trading and or consistently.
News is something you can chase… but it can be anticipated and seen well in advance of its release.
Bank Reports are interesting to some… and I have stated this before… Chris Lori, in whom I respect, preaches and teaches their use… I never… repeat N.E.V.E.R. read them or pretend to find their usefulness. Yet I make a killing without them.
This is the classic Fundametal vs. Technical and to each their own… I just win with leaving the majority of the things you list as essential. To respond also to the notion the Big Boys watch the news… um… the Big Boys I track and trade are ALREADY positioned before the “news” and I am in there with them… and I use the “News” to fuel my already established positions.
I love it when strawmen are made with powderpuff and can’t stand to begin with. lol
My absence from the forums in March 2013 does not equate to no trading live via MyFxBook. I have plans to rub the pundits noses in it when I complete the task. I just want to be free from the forums while I do it and the other things I have planned for my personal life… outside of Trading.
Back to the drawing board…
Hmmmm… maybe if I change my nick to CentralBanker007 it might sound legit. Don’t hold your breathe. :54:
I allow the Commercial Traders [Commitment Of Traders] to tell me what the REAL FUNDAMENTALS are… visually.
The Commercials have trained highly focused people on the heartbeat of the economy… I don’t trust old hat news releases.
The Price Patterns and Concepts I trade with are used with the “Fundamental” picture and Higher TimeFrame in mind.
This is why I trade with 80-90% accurracy… consistently.
No news is good news. No Bank Reports to wade through… no bugging down the mind with things already in Price.
The level of information is vast to newbies and the work required to learn my concepts takes time and effort. It’s easier for the weak to say it’s information overload… or it’s overcomplicated… but this is coming from folks admittedly floundering in the market.
Doctors study a long time and do very dry research for their respective fields… once they understand the process… it’s a daily routine that changes slightly by case study… but they understand their role and the process. They don’t change their minds everytime a Medical Article comes out in Rx Medical Monthly.
There are many roads to wealth in Trading… and there are those that do not require Fundamentals and yes you can trade without Judas concepts… and you won’t be entering in the sweetest entry points… thats all.
Carry on and have a wonderful and memorable holiday!
Price is a lagging indicator of global information flow… It chases the news… It is dictated by it… Therefore, if anyone is doing the chasing, it’s the guy blindly trading off of technical analysis…
That has to be the most asinine commentary on price I have ever heard.
Price movement is driven by many influences, however one cannot predict what that outcome will be with consistent accuracy without employing some level of technical analysis.
You don’t get these results and for this long with blindly chasing… if you understood my work you’d understand that and me.
Even the blind know their way to the Bank… and we whistle and sing all the way there. I have Faith In Price Action and my understanding of it… I Trade by Faith… not by Sight.
You’ve already agreed with me ICT…your last post you’ve said the big boys price in the news… They have to be watching the news, and be basing their decision on the news to price it in… So we agree that is how the professionals trade…which is entirely my point
If combining technical and fundamental analysis will give me an edge to be consistently profitable as a trader, I will do my very best to learn them both… I just want to make “MONEY”. I want that piece of cake and eat it too.
Now where do I suck at? I think I have never pay attention into Fundamentals…lol…
Grab my pen and notebook… ready to learn…as long as my little brain can handle more. Bring it on.
Fundamentals have very little significance on the majority of us retail traders. Trading the news is not trading fundamentally. It’s gambling.
Technical analysis allows us to see price movement in a wide variety of ways. It’s a measurement of price movement, where we already know that movement of price is driven by the psychology and at a macro level economics.
So while it can be argued that we are always lagging, that’s inherent. We are not market makers nor do we have the economic capacity to push the market in any direction.
We are leeches. We do what we can to skim off the movement in price. Knowing this, we will never ever be able to capture the entire move. It should not even be considered.
I will forever and always come in late and either leave late or to early. And quite frankly, that’s just fine by me.
I understand what you mean however, I know there is more into these “world of trading”. We cannot ignore the news/fundamentals around us. It is always there day in and day out. We can always take advantage what it presents us in technical or fundamental way.
I just don’t want to limit myself into just “one way” of trading. It is a personal preference…
If I can make more money by doing both I would. If not, then I will stick to what I know and what is working for me so far but I won’t limit myself…
Many people limit themselves to what they think they can do. You can go as far as your mind lets you. What you believe, remember, you can achieve. Be open for any possibility and the opportunity it represents…It’s just me…
I’m certainly not an expert at forex but surely you are not serious making a sweeping statement such as “fundamentals have little significance for us retail traders”. I find it extremely difficult to believe that someone can trade successfully whilst completely shutting out all economic news, except perhaps for scalpers. Do you genuinely look at only a chart and never once look at the headlines, even with major events like QE3 sparking massive 600 pip rallies? I didn’t think so. Imagine if you traded purely on fundamentals - you would’ve bought fiber at 1.24 and perhaps closed out the year at 1.33 the other day.
I never pay attention to the news. I trade price action. Whatever decision the masses decide to go in, then that’s the direction I turn in. My thoughts on the results of the news at irrelevant. The market will do what the market will do.
I implement appropriate risk management, so I’m not concerned about those massive 600 pip moves going against me. Odds are I would have probably been on the side that made that type of swing.
I trade naked charts. I’ll let everybody else complicate this industry.
If that is truly how you trade, completely ignoring all economic happenings, then I am thoroughly impressed - no sarcasm, I genuinely am impressed.
I just know that for me personally, I’d rather have a look at the news now and then, just to have that backdrop in my mind that ake was mentioning.
I like what ICT teaches, that fundamental analysis is built in to COT, yield data, higher term analysis, etc. I check the economic calendar (after performing various technical analysis) for the sake of seeing when I might expect a given pair to have the highest liquidity; this is how (thanks to ICT) I trade. However, I cannot think of any argument in favor of my being less educated. I want to be a successful trader and a knowledgeable one. I’m happy going to the bank thanks to what I’ve learned about studying charts, etc. However, while I’m standing in line to make my deposit, it’s nice to be able to talk about global monetary policies that affect the Euro, GBP, etc…
Saying that “price is a lagging indicator of global information flow” seems like an insightful way to phrase it to me. Don’t most price action threads say that price is the result of order flow, which is based in part on information flow. I know that it’s an oversimplification of the currency markets given the manipulation of price by the Market Makers, who’s patterns we’re taught to look for. Conceptually I agree with Banker that learning about fundamental analysis is a good thing and can be useful. However, we’ve been taught to use price action to identify when something is likely to happen. We’re not chasing price after it’s gone up. Very often we’re watching it go down so that we can anticipate when it will go up and be ready when it does.
Calling a statement “asinine” is like someone saying ‘shut up.’ It detracts from the quality of the discussion.
A real… and I mean a [B]REAL[/B] fundamental trader does NOT trade the news… well at least not the news that we can find in BP or FF calendars…
Jim Rogers and Marc Faber are examples of real fundamental traders… this kind of traders focus in central bank policies, commodities, yields, security, etc.
They do not rely in government numbers… they go and do their own field research… they talk to politicians and company CEO’s… they know where the money will flow…
Although all of this, we as retail traders MUST try to figure out the environment in which we are trading… and then go to the charts and do all the technical stuff we know
May be we are a step behind the “big guys” but close enough to make money.
Yunny… News is a broad term I am using to encompass everything besides what is on price charts…
And mastergunner… You are right when you say fundamentals don’t really have much to do with retail traders… Retailers typically try to ignore them… Lol. I’m not sure we want to use the common retail trader as a model here.
I would like to tell a quick story that adds to the validity of ICT’s fantastic and award winning teachings (If there was such an award for the best free teaching then ICT you have won hands down imo). Thank you my friend. …here we go
I was in the Topstep Trading combine for the past 2 months. While in there, you can enter different chat rooms like crude, S&P, grains futures ect. I was in the crude futures room. Each person in there has a badge next to there name that is either a C (Combine = trying to become a fully funded trader) or L (Funded trader = they “Are” a fully funded trader). Now,To be a funded trader you have to pass very difficult numbers ie. 5% P&L in ten days with a small daily and weekly loss limit, winning time ratio better than losing time ratio along with a bunch of other stats that you must pass. It is a very difficult task to become funded. This brings me to my point. This crude chat room that was “Loaded” with very talented traders were constantly referring to the ICT methods ie. ote, London close, kill zones, Asian range ect. This is how I found ICT! They have a folder that anyone can access in the room that has the ICT torrent! Now lets think about this for a minute. These are “Funded” traders putting out ridiculous trading numbers on a daily bases, AND, they are doing this in crude futures…not Forex where he teaches about his methods…these guys are using his methods in crude futures. This is how robust his teachings are. So Banker928, come on dude…really… you need a hug.
There isn’t anything to argue here… Professional traders extensively analyze fundamentals… End of sentence. If you are getting bothered by that then either you aren’t understanding what I am saying, or you are just getting annoyed that what I am saying doesn’t align with what your “guru” preaches.
ICT even admitted that is what professionals do… The big boys price in news… Read back a few posts
A chart pattern combined with economic context means being able to tell the difference between when price is going to breakout or create a double top/bottom… Without the fundamental context, your flipping a coin
