Technical analysis VS fundamental trading

Which is more profitable? And is there a chance you can loose when hedging?

I believe that technical analysis should be more profitable because i think a technical analysis trader has more opportunities, as for me fundamental trading requires to trade longer term.
If you are referring to hedging in the same pair most people always loose when they hedge and others dont win anything, so in the end its a stupid thing to do because you gain nothing by hedging.

I believe a combination of both will give the best results. Even the most ardent supporters of price action analysis will concede they check out news feeds and macro data from time to time.

In regards to hedging, there are a lot of ways to do it. For example, if I hold a position over the weekend (which I seldom do anymore) I’ll do a “same pair hedge” where I take a position opposite of the one I have open. It’s on the same currency pair, so if I get caught in one of these crazy weekend gaps, the hedge position will cover it. Of course, I have to pay the spread for the privilege of being safe, but it is worth it not to lose half your account when price jumps your protective stop loss.

2 Likes

What is the difference between Fundamental and Technical Analysis?

Fundamental analysis and technical analysis are the most common approaches when it comes to analysing the markets and are considered to be at opposite ends of the spectrum. Both methods are used for researching and forecasting future trends in an assets price, and like any investment strategy, both have their advantages and disadvantages.

Fundamental analysis is a method of evaluating an asset by attempting to measure the intrinsic value and determining what the fair value is. Fundamental analysts’ study everything from the overall economy and sentiment to the financial conditions and management of companies. Earnings, news, assets and the economy are all important attributes when it comes to fundamental analysis.

Technical analysis differs from fundamental analysis in that the assets price and volume are the only inputs. The core assumption with technical analysis is that all known fundamentals are factored into price. Meaning that there is no need to pay close attention to them. However, it is important to remember the market is based on a group of human beings determining what the value of an asset should be and human beings can often be irrational.

Technical analysts do not attempt to measure a assets intrinsic value, but instead, use charts to identify patterns and trends that suggest what an asset will do in the future.

Can They Co-Exist?

Both schools of thought are often seen as opposing approaches to analysing assets, but at Starttrading we believe it is much easier to experience success by combining the two techniques.

For example, an investor may use fundamental analysis to identify an undervalued asset and then use technical analysis to find a specific entry and exit point for the position.

i prefer a combination of both. in fact i see the combined effort as sentiment trading. both tech and fund results in sentiments after all. for eg

  • tech : 1.12 is strong. let us all buy there ( sentiment to buy )
  • fund : the euro zone is not looking well. eur/usd will drop ( sentiment to sell )

hope this is helpful :slight_smile:

Both are profitable, but we need to make sure trading skill first. On the other hand, don’t apply hedging, if you are not master with.

depending on the taste of each trader.

In my experience, you cannot do both at the same time, unless you have the time to do so. Most technical traders have day jobs, so they have to rely on technical data to open a trade and move on with daily life, such as work.

I would love to be a fundamental trader, since I feel that you can be more clinical in short bursts…But I am working while the “fundamental” is playing out.

I do technical trading, but I hate it. I cannot afford fundamental trading in time measurement.

Just close the trade before the weekend.
Dont pay an extra spread for the “privilege” of closing the trade.

You have to admit, sometimes a trade is going so well that you do not want to close it. Should you close a trade over the weekend? Not if your SL is already in the profit. Negative trade Friday evening, sure…Kill it for safety.

I pay more per trade for guaranteed SL with my broker, even I de-activated that function. Maybe keeping trades open over a weekend should be about how serious you are about long term trades.

I once had the DAX30 open for a month as a test drive on very long term trades, the 1st weekend I took a hammering! left it open, trade paid off closing it with a month worth of profits…

It depends on how you analyze your purpose for the trade. If you trade per hour, kill that trade before the weekend, don’t mess around…But if that trade serves a bigger goal, let it be, weekend punishment and all.

I definitely agree, thanks for the input.

I am personally fundamental trader. I like to play on big moves as earnings are here the highest. However, this way of trading is probably most difficult, so there are not so many traders that are trading this method. Also, some other techniques, with good strategy can bring good profits