I believe fundamentals to be the better way to become profitable trading, with technical indicators being as
minimal as possible.
I’ve been making an excel spread sheet to help me organize and compare economic data such as interest rates
trends in the USDX and speeches given by people like Draghi.
I’ve decided I will limit myself to at most 2 currency pairs because at the moment I’m overwhelmed at the
sheer amount of data and am having trouble really understanding more major driving forces and even more so
why they are the major driving force of a currency.
If anyone could help maybe tell me how they started off in trading fundamentals and how to not get swamped with to much data.
Basically I’m working on sifting through the crap to find some gold in the form of a fundamental sound trade based on logic and the inner workings of the economy, and not some fancy indicator that I don’t even know the math behind.
I give same importance to fundamentals and technical analysis for profitable trading. Even there is good tips at forex-fundamental-analysis.com regarding this.
Just realize that fundamentals (as opposed to news headlines) only act on price in the longer time frame. You won’t be able to trade in the short term using them to time your entry and exit.
First of all…what exactly do you mean by “technical indicators”. Literal indicators with squiggle lines and math equations that are derived from price? Or technical indicators such as correlated markets, trendlines, support and resistance zones, and over all “trend”?
Second of all (and most importantly), WHY do you believe fundamentals is better than technicals?
we know for example that Chinese middle class is expanding with lots of potential still to the up side, we also know within 5 years their currency will be floated to the strong side.
4 year timeframe (as adopted by a number of hedge and mutual funds) offers some VERY EASY equity plays in companies having good balance sheets, market positioning and a roadmap.
But within that time, anyone using modest stops needs to look at technicals and other shorter term strategic indicators before taking positions.
To sum things up 1) I’m looking to trade for longer terms which is why I believe fundamentals to be more “useful” for me.
and 2) Sorry for comparing the two technical and fundamental really derailed the initial thread question
You’re looking to make long term trades, right? Maybe attempting to track the recent long term market sentiment or bias would be a more workable approach than trying to navigate the jungle of “fundamentals".
For example, simply keeping track of the current price levels in relationship to the high and low of the previous month or previous week would give you a pretty good sense of recent market sentiment/bias. Then trade in line with recent sentiment/bias, simple and easy.
Throw up the EUR/USD daily chart for the last 12 months, look at it from across the room, what more do you need? Sometime it’s good to keep things simple and not over complicate it.
I don’t use fundamental analysis. My trading is based on some simple technical analysis and market sentiment.
During the trading day I follow the guys blogging over on Forex News | Currency News by ForexLive and as they say in their commercials …I watch (long pause) CNBC!
technicals vs fundamentals is a never ending discussion!
I use fundamentals only to set a market bias, but the trade is pure technicals.
Now Fundamentals move the market but then how place a trade with so many variables a lot of them very hard to quantify ??(well at least for us retailers)
unless you are a position trader with very long targets, collecting and trying to measure Draghi’s speeches, trading would be very discouraging
ZeroHedge has the best info available in the web, but don’t trade based on headlines, remember the fx market is the most “front-run” market in the world (and it is legal!!), if you do not believe me just ask Philipp Hildebrand and his wife…
