Fundamental Trading Always beats Technical Trading 100% | Forex Factory

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Fundamental Trading Always beats Technical Trading 100%

  • #1
  • First Post: Mar 24, 2018 12:18pm Mar 24, 2018 12:18pm
Hi,

I just thought I would share this as I find it amazing how many people purely focusing on technicals rather than finding out what sentiment is driving the market. The reason why retail traders lose money is because they are not sailing their trades in the same direction as the big institutions.

The big institutions only use technicals for point of entry or to close a trade. They would never use technical indicators to run a trade as they are trading billions on behalf of their clients.

I use a professional news feed called Ransquawk which lets me know the sentiment of the market hence why most of the time I am on the winning end of my trades.

I have made 100's of pips in minutes trading central bank minutes release, speeches, or even just instant news releases due to hearing the sqauwk via ransquawk.

An example of strong sentiment can be seen on GBP/CAD. GBP has been killing CAD for weeks because the pound is bullish due to the BOE indicating they will hike rates this year again. The CAD has been super weak because NAFTA trade talks with USA have not gone in their favour and if deal does not materialise then it will harm the Canadian economy. So this is basically STRONG VS WEAK SENTIMENT CURRENCY = PIPS!!!

You can see in this video how a gentleman made 50k in minutes during the whole Greece saga because he knew where to get in - https://www.youtube.com/watch?v=lSKT6o3gpo0&t=7s

Forex markets are primarily driven by central banks and geopolitical matters. For example if a central bank indicates they are going to hike then that currency will rally for weeks until the interest rate is released. If there is news of them cutting rates then the currency will become bearish.

My advice is if you want to be trading in the same direction as the big institutions then focus on the fundamentals and not technicals. Technicals should only account for 20% of your trading.

Thanks for reading and please be sure share your views.
  • #2
  • Mar 24, 2018 12:27pm Mar 24, 2018 12:27pm
Here is an example of my eur/nok trade as you can see i made over 90 pips within 15 minutes and that's because I heard via the squawk that the nok central bank planned to hike their interest rates in 2018 (previously 2019). This news caused the market to go crazy and I went in super big as I knew the rally would happen without doubt.

Technicals could never guide you or predict you to a trade likes this. Only the live fundamentals can.

If you want to make money and not be in the category of the 90% that lose money then get with the fundamentals and save yourself the heartache.
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  • #3
  • Mar 24, 2018 12:42pm Mar 24, 2018 12:42pm
You need both. Strategic trading based on both fundamentals and technicals will offer the best results on a consistent basis.

KP
Do your homework, follow the footprints of smart money
  • #4
  • Mar 24, 2018 12:48pm Mar 24, 2018 12:48pm
I agree with you to a certain extent.

I find it mind blowing when I go through certain forums and I see guys using big Lots on trades based on technical setups not knowing a central bank governor is due to speak the same day or not knowing there is cpi data coming out.

Fundamentals will guide you and let you know the bigger long term picture.
  • #5
  • Edited 2:57pm Mar 24, 2018 2:44pm | Edited 2:57pm
Quoting Samson85
Hi, I just thought I would share this as I find it amazing how many people purely focusing on technicals rather than finding out what sentiment is driving the market. The reason why retail traders lose money is because they are not sailing their trades in the same direction as the big institutions.
Agree, good post, fundamental trading can be very rewarding, but (like everything else) with the proviso that you know what you're doing. Pairing a strong currency against a weak one can improve your odds. Having access to an institutional grade news feed is important, for obvious reasons, if one is trading high impact news.

The top institutional players know what the market is looking for, what numbers the central bankers are focused on, and how much deviation from expected news outcomes is required to (probably) cause a certain size move. Many of these folk also have excellent feel for where 'fair value' should be, and place their biggest bets when price is at its greatest deviation from this value, or when there is otherwise a divergence between the direction price is actually moving, and the direction price 'should' be moving, according to key fundamental measures. (There are other ways of assessing value by using intermarket analysis -- here (https://www.forexfactory.com/showthread.php?p=10811723#post10811723) is an example of an advanced technique).

When analyzing news outcomes and economic numbers, it's also necessary to have a good feel for the extent to which a given outcome has already been anticipated, and is therefore already 'priced in'. A good example was the fed's rate hike last Wednesday, where the subsequent USD selloff might have surprised the uninitiated, but the hike had long been anticipated (and Powell's comments were more dovish than expected).

Speed can also be an important factor in certain situations. Some foresight is necessary as (obviously) one must act ahead of a move; afterwards is too late. The retail trader is competing against top institutional players, who in many cases have faster access to information and execution speed.
  • #6
  • Mar 24, 2018 2:51pm Mar 24, 2018 2:51pm
Quoting Samson85
Hi, I just thought I would share this as I find it amazing how many people purely focusing on technicals rather than finding out what sentiment is driving the market. The reason why retail traders lose money is because they are not sailing their trades in the same direction as the big institutions. The big institutions only use technicals for point of entry or to close a trade. They would never use technical indicators to run a trade as they are trading billions on behalf of their clients. I use a professional news feed called Ransquawk which lets...
Hi,

Thank you for this informations. What would be interesting for me is, how you manage to integrate a audio stream in your daily life. I for example have to work from Frankfurt open for minimum 8 hours. I can not hear something while work.... Do you have to sit the whole day in front of your pc and wait until something happens? Or how do you plan your trades. Thank you.
  • #7
  • Mar 24, 2018 8:13pm Mar 24, 2018 8:13pm
Quoting kleybenny
{quote} Hi, Thank you for this informations. What would be interesting for me is, how you manage to integrate a audio stream in your daily life. I for example have to work from Frankfurt open for minimum 8 hours. I can not hear something while work.... Do you have to sit the whole day in front of your pc and wait until something happens? Or how do you plan your trades. Thank you.

Thanks and very good post.

In relation to deviaion of numbers a good example was the cad cpi on Friday. Now the y/y cpi was over 2% which means the boc will be forced to hike but with nafta lurking it makes things tricky but I think we may get a hike next release.

In relation to speed you don' have to be super fast you just have to be able to assess within 10 minutes how impactdul the news is. For example when Theresa May called a snap election the pound rallied for quite a while. Another is example is if the junior brexit minister says we are close to a brexit deal it will only rally for a bit as we have heard this 100 times and the UK is still in the same space.

The Fed last week upset the market because they are not hiking 4 times this year and instead added another hike in next year. Adding another hike next yr will not guarantee it will happen hence why dollar sold off. Traders want to see certainty.

Expect the eur/USD to gain strength up to 1.26 as the ecb have said they will likely quit qe soon and hike potentially quite soon.

The jpy currency has been gaining so much strength due to geopolitics. No form of technical analysis could predict the moves. All you need to do is lool at the 1 day chart for gbp/jpy or usd/jpy. Right now it cannot uphold an upward trend due to nonsense going on in Japan and usa.
  • #8
  • Mar 24, 2018 8:18pm Mar 24, 2018 8:18pm
Quoting kleybenny
{quote} Hi, Thank you for this informations. What would be interesting for me is, how you manage to integrate a audio stream in your daily life. I for example have to work from Frankfurt open for minimum 8 hours. I can not hear something while work.... Do you have to sit the whole day in front of your pc and wait until something happens? Or how do you plan your trades. Thank you.
You don' have to sit in front of your computer the whole day but it would help you make more money.

You can swing strong fundamental trades.

For example a strong fundamental trade right now would be eur/USD or gbp/USD. You need to know which currncies are most likely going to hike and have a good level of demand.

At the same time you have to be tuned in everyday to make sure that some form of news does not ruin your trades.

You can set alerts on your phone on forexlive.com which will send you messages every time breaking news or data release happens. This will stop you from trades ruining.
  • #9
  • Mar 24, 2018 8:28pm Mar 24, 2018 8:28pm
Total fucking Bullshit!

Money knows where price is going long before the press...

If you don't know this, you have no idea about market!

Watch you S&D levels, daily and weekly trends.

If you are waiting on the fundies to make you a millionaire...start talking to the big wigs in the Stock Market...you ain't gunna get this shit out of Forex.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #11
  • Mar 24, 2018 9:15pm Mar 24, 2018 9:15pm
Do you have to swear
Its disgusting.
Twee - is this the sort of language that should be promoted on Forex Factory
This place really has down hill and 5 people though it was great.
This is my last ever post.
I will never ever visit these forums again.
  • #12
  • Mar 24, 2018 9:24pm Mar 24, 2018 9:24pm
Quoting Fader123
Do you have to swear Its disgusting. Twee - is this the sort of language that should be promoted on Forex Factory This place really has down hill and 5 people though it was great. This is my last ever post. I will never ever visit these forums again.

Poor fucker...you think your opinion actually matters?

lol

I put asses in chairs...I am (a) reason people sign up and participate in this forum...

Nobody will even notice your demise.

Boo
Fucking
Hoo...
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Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #13
  • Mar 24, 2018 9:46pm Mar 24, 2018 9:46pm
Quoting Fader123
Do you have to swear Its disgusting. Twee - is this the sort of language that should be promoted on Forex Factory This place really has down hill and 5 people though it was great. This is my last ever post. I will never ever visit these forums again.
time to run to the nearest "safe space " my friend....
  • #14
  • Mar 24, 2018 9:58pm Mar 24, 2018 9:58pm
Quoting Samson85
{quote} Well I have provided an example of a 20k trade. Can you? All this shouting you do makes no difference. Back it up with your account and show me big wins. You think people at investment banks are placing trades based on price action? Really? Be smart. Keep using your indeicators please and I'll focus on what the central banks are doing along with geopolitical events.

Ohhhhhhh...you provided an example...

Well...it's clear then...pshhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh

Show me $10 you have made off of a single trade based on fundamentals...

Not somebody else...you.

Sit in market for a week and show me your action.

Based on News or Fundies or any other silly fucking idea that newbies have.

You don't have to listen to guys like me...it's not a prerequisite...but for you and anybody else who visits here, it will help.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #15
  • Mar 24, 2018 10:10pm Mar 24, 2018 10:10pm
Samson. I like the message of your post. And i definitely agee that understanding fundamentals is definitely crucial to trading.

No offense however, you are fighting a near impossible battle trying to convince the general retail community to adopt fundamentals into their trading. It is akin to debunking religion! (No religious offense meant here)

Many before you have tried, preaching the importance of fundamentals. Guess what? They all recieved mostly negative backlash, hostile remarks, and comments with claims that fundamentals are useless etc.

It is good thou to find a fellow who appreciates fundamentals on this forum! Thats like finding a needle in a haystack!

Hit me up if you wanna discuss fundies, economics or politics!
I look for value wherever it can be found
  • #16
  • Mar 24, 2018 10:29pm Mar 24, 2018 10:29pm
Quoting synicz
Samson. I like the message of your post. And i definitely agee that understanding fundamentals is definitely crucial to trading. No offense however, you are fighting a near impossible battle trying to convince the general retail community to adopt fundamentals into their trading. It is akin to debunking religion! (No religious offense meant here) Many before you have tried, preaching the importance of fundamentals. Guess what? They all recieved mostly negative backlash, hostile remarks, and comments with claims that fundamentals are useless etc....

Thanks.

It' not a case of trying to persuade but trying to make them realise they are not trading the way the big boys are.

Seeing people dissapeart of forex factory or comment on posts knowing they are losing money is shocking to me.

People need to realise buying or shorting based on an indicator is not the way to trade.
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