COMPETELY NEW to Forex, as well as stocks and basically investing.
3 questions.
Is technical analysis better or fundamental? which one do you guys use in forex?
I have heard the argument that in now-a-days a trader relies on fundamental is going to be chasing tails after the big boys who gets their release news/info way before individual traders. you also have to have certain info source if you want to be efficient in fundamental, am i wrong? how? also the big boys of currency trading, soros, lipschutz, all seems to be fundamentalists? )
if the above is right, for individual traders without advance techs and info gadgets, relying on technical indicators is the way to go?
where could I find info about both approach and how to be better trader
ps. anyone have a micro account in here? i know only FXCM, what other ones do you guys recommend?
all a tech trader needs is a chart, how many indicators/gadgets is entirely uo to the individual but a naked candlestick chart has proven success for many succesfull trader, just understanding patterns, candlestick formations and areas of support and resitance.
a good tech trader will always have an eye on the important new releases, look at the forex factory calender, which gives you the time of the news releases throughout the day (Pay particular attention to red flag news)…and this is good place to start if you just intend trading news/fundamentals.
i would suggest most retail small time forex traders are purely tech traders bearing in mind news releases were that could possibly grab some extra pips quickly/or they avoid those times altogether.
FXCM is as good as any micro broker, others being fxsol, oanda, but FXCM imo is as good as any
By travpip at 2009-10-23
the circles represent red flag news releases and the resultant move, the rectangles mostly tech plays, the last circle was were the eco/funamental predictions got it wrong and the tech traders had been pricing it into the currency for the past week or so - but the release of the GDP figure was a negative number as opposed to a posivitive - meaning the UK was still in a recession
thanks for the info.
so you would say that for retail trader, the most important part will be technical analysis, such as price action, and understanding some key events that are bound to affect the currency in the long run?
I personally will always be a technical trader. To much involved with trying to figure out what fundamentals are. I literally get a headache just looking at the news. So I try to stay away from anything that will influence what I do without confirmation with my indicators.
Another thing to keep in mind is the possible increase in spreads while news events are present. Especially big ones. Spreads + Slippage may put you in a bad position.
Technical Analysis I think is one thing a new forex trader will always learn first. It’s ‘easier’ to learn how an indicator for example works in a situation, then figuring out how news events correlate with market conditions to produce profitable trades.
IMHO fundamental analysis comes with time, takes a lot of watching the markets.
There is none better than the other. It takes longer to understand fundamentals and therefore use it to your advantage.
And Fundamentals is [B]not[/B] just news and economics. Nowadays monetary factors, meaning the expansion of credit and currency in circulation, are playing a far bigger role. On top of that comes diversification of central banks out of the USD and USD carry trades.
The more cheap money is created the more markets are affected by it. On top of that comes leverage.
Based on Fundamentals in it’s pure sense aka economics the USDX should be below .70 by now because the global real economies are deep in recession and banks are only left standing because of QE aka cheap money. That’s why equity markets rise. Not because of company earnings but because of cheap money aka liqiudity slushing around the different markets.
As mentioned in other posts in this thread TA trader are in the majority. And so are Index Funds with their computer driven algos based on TA.
IMO…if you understand monetary factors influencing FX [B]and[/B] TA you’ll have an edge over TA traders.
Hi, your information are very helpful like me as newbie in the Forex Market, i try many times to understand the news at forexfactory but failed to understand, help me to understand the news and predict it movements.
It is not a surprise that you are not getting better from fundamentals alone. Currency and macro-economic is a complicated subjected. I am learning in my university right now, and even with the text books and professors, there are still things I don’t understand. but that eventually comes with time.
with that being said, unlike technical indicators, I think if you really want to learn fundamentals and understand its intricacies, you have to really delve into it. like school textbook style.
