Hello, Philip
Your post touches on several topics, each of which could take an entire thread to discuss thoroughly. I wonât attempt that. Instead, Iâll just throw out a few comments in the hope that it stimulates further discussion.
[B]Regarding ânewsâ: [/B]
When you refer to ânews reportsâ, are you talking about the economic data releases that appear in various Forex Economic Calendars? If so, you are not trading on âfundamentalsâ; rather, youâre doing whatâs referred to as ânews tradingâ â a very difficult thing for novice traders to do successfully.
On the other hand, if youâre studying true fundamentals, and attempting to use them to guide your trading, then you are definitely in the minority around here; I would guess that 90% or more of the traders on this forum are technical traders. Consequently, there arenât many traders here who are qualified to give specific advice on fundamental trading.
In my opinion, true fundamental analysis works well on very long time-frames â positions held for months or years. Your stop-loss and take-profit ranges (20-70 pips) indicate that you are probably day-trading. I donât think itâs possible to apply true fundamental analysis to day-trading. But, Iâm speaking from very limited personal experience with fundamental analysis.
[B]Regarding stops and limits:[/B]
Determine a rational point at which to place your stop, without considering where to place your limit. Then, determine a rational point at which to place your limit, without considering the ratio between your stop and your limit.
After you have chosen your stop and your limit, independently of one another, then compare the two to determine the implied risk/reward ratio. If that implied ratio does not comport with your trading rules, then you should reject the trade. Do not manipulate your stop, or your limit, or both, in order to make the ratio fit your rules.
You asked what stops and limits other traders use. Most traders will tell you that it depends on the pair you are trading, the time-frame you are trading, and the system (strategy) you are using. Since your strategy is very different from what most of us here are using, we probably canât give you much help with stops and limits.
[B]Regarding strongest and weakest currency:[/B]
There are various âheat mapsâ which rank currencies â pretty much in real time â according to technical strength (i.e., recent price action). Those heat maps are algorithm-based; so, to that extent, they provide an objective ranking of the individual currencies.
By contrast, your attempt to rank currencies based on fundamental factors is highly subjective.
[B]Regarding technical indicators:[/B]
You asked whether âwe need all these indicatorsâ. There really is no âweâ in the choice to use, or not use, indicators.
Some traders use their preferred indicators successfully. And some strategies are built around technical indicators.
Other traders make a point of sneering at any and all technical indicators, and anyone who uses them. This latter group is frequently preachy, condescending and obnoxious; and they frequently get banned from forums where civility is enforced.
You have already answered the âindicator questionâ for yourself: Based on [B]your[/B] current trading strategy, all [B]you[/B] need is your âfundamental analysisâ and trend lines.
Clint
