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  • #161
  • Mar 30, 2018 11:16am Mar 30, 2018 11:16am
Quoting nathaniel
Great thread, and really enjoyed it so far. Thank you for starting it and looking forward to more engaging discussions. Just started on Ray Dalio's Principles and was captivated by his deep understanding of how economies, finance and the global market works. And now, chancing upon this thread (after taking a long break from trading) has helped me in piecing the puzzle together. Cannot help but agree on how fundamentals and sentiments shape and move the markets. I'm keen to also subscribe to ransquawk but how central is this to picking up fundamental...

I would start with forexlive.com as it's free and see how you cope with dealing with the news. If you go to there website via your phone you can subscribe and receive news release and data results throughout the day. They appear like what'sapp message on your phone. Quite useful but remember you also need to read Bloomberg every 3hrs and check reuters website also as they provide good trade ideas. I only went long pound on Monday because a Bloomberg article said traders would be looking to buy and come Monday gbp/USD did more than 50 pips.
  • #162
  • Apr 1, 2018 1:42am Apr 1, 2018 1:42am
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...
I agree with you. I use economic calendar and select dates on which I will trade either breakdown or breakout happening and mark downside for a stoploss. I only buy currency future options so I would look for an entry which should deliver 90% of profit in a maximum duration of 10 days or hit 30% stoploss. For breakout buy call, for breakdown buy put. Always trade the most liquid one symbol EU. In one year with the kind of a setup very similar to that of yours I make 10 such winners by attempting to 12 in a year. Good thing no roller coaster ride for me as I am not selling options.
Practice makes a person perfect
  • #163
  • Apr 1, 2018 2:09am Apr 1, 2018 2:09am
Quoting simnz
{quote} I agree with you. I use economic calendar and select dates on which I will trade either breakdown or breakout happening and mark downside for a stoploss. I only buy currency future options so I would look for an entry which should deliver 90% of profit in a maximum duration of 10 days or hit 30% stoploss. For breakout buy call, for breakdown buy put. Always trade the most liquid one symbol EU. In one year with the kind of a setup very similar to that of yours I make 10 such winners by attempting to 12 in a year. Good thing no roller coaster...

This is fantastic to read.

Some traders don't even look at the calendar which almost dazzles me and they wonder why they lose money.
Cpi, GDP and employment can move the market over 100 pips easily and even carry on until the next day depending on how big the deviation is from the forecasted result.

I know a guy who lost 40k in the matter of seconds because he didn't consider the cad cpi result which is probably the most powerful on the market (When nafta isn't around).

Options is something I want to consider as I get told it's alot stress free and you can do more with your time during the day.

Do you keep up to date with central banks etc?


How long has this fundamental system worked for you?
  • #164
  • Edited 2:55am Apr 1, 2018 2:43am | Edited 2:55am
Quoting Samson85
{quote} This is fantastic to read. Some traders don't even look at the calendar which almost dazzles me and they wonder why they lose money. Cpi, GDP and employment can move the market over 100 pips easily and even carry on until the next day depending on how big the deviation is from the forecasted result. I know a guy who lost 40k in the matter of seconds because he didn't consider the cad cpi result which is probably the most powerful on the market (When nafta isn't around). Options is something I want to consider as I get told it's alot stress...
Options are a very useful tool. However if you do it this way and are doing it right the majority of the time you will be buying expensive options.
The MMs are not going to be selling you cheap options that are going to expire in the money. They are going to make them very expensive. These guys are the best in the business at forecasting price, they have to be otherwise they will not be in business for long.

A better strategy, and one the institutions employ, is to take the trade on the spot market and then buy cheap options in the other direction of the trade as a hedge.
If your spot trade pays off you will still have the option to use as a hedge against future trades.
Boxing clever since 76.
  • #165
  • Apr 1, 2018 2:54am Apr 1, 2018 2:54am
Quoting Samson85
{quote} This is fantastic to read. Some traders don't even look at the calendar which almost dazzles me and they wonder why they lose money. Cpi, GDP and employment can move the market over 100 pips easily and even carry on until the next day depending on how big the deviation is from the forecasted result. I know a guy who lost 40k in the matter of seconds because he didn't consider the cad cpi result which is probably the most powerful on the market (When nafta isn't around). Options is something I want to consider as I get told it's alot stress...
I have given 30 years to this kind of trading breakout/breakdown strategy one financial instrument and one symbol pair. It is entirely stress-free because your risk (stop loss point) is determined at the time of trading. Your profit point too. You don't have to worry about positions, lot, money management. All you have to do is practise and practise your ability to identify downside and the breakout/breakdown triggers.

If you are good at daily monitoring and making re-adjustments, then selling option is good. You can go for it if you think the breakout/breakdown will not react violently, and that you are willing to sit through it when it wobbles or stalls, and market is paying adequately by way of option premiums to see the tug-of-war show.

If you gain proficiency in both buying and selling, you can master ratio spreads.

I have watched spot fx screen from 2003 to 2016 when my back was affected as a result of intensive chart watching (not watching screen any more) the way pairs played games. As a result of watching this game for so many years I developed a sense of what is likely to happen (not right always because the game is not conducted by me but by big market makers). GBPJPY is the only symbol I watched and it did pay off well.

By trading for long, I lost interest in making money than treating gains as a reward for taking part in a challenging game. This aspect of trading engages me.

If you can throw more light on where to look for the banks information, it will be highly appreciated.
Practice makes a person perfect
  • #166
  • Edited 3:13am Apr 1, 2018 3:03am | Edited 3:13am
Quoting copi88
{quote} Options are a very useful tool. However if you do it this way and are doing it right the majority of the time you will be buying expensive options. The MMs are not going to be selling you cheap options that are going to expire in the money. They are going to make them very expensive. These guys are the best in the business at forecasting price, they have to be otherwise they will not be in business for long. A better strategy, and one the institutions employ, is to take the trade on the spot market and then buy cheap options in the other...
Nothing happens in a day. This is not a lottery. It is part of a business of running a casino. You have to invest your time, money in experimenting and developing your own metrics of what constitutes a value buy or value stop loss or value duration or value strike price or value delta or value gamma or value time, or a combination of all these.
Practice makes a person perfect
  • #167
  • Apr 2, 2018 8:35am Apr 2, 2018 8:35am
Quoting Samson85
My current positions down below showing dollar losing its legs and I expect it to be for quite sometime unless they get super yields or ground breaking news. {image} {image}
Could you talk about your thought process behind placing a SL when it comes to doing a fundamental trade? As I am assuming a SL is there for you to not only manage risk but also tell you that your fundamental analysis is wrong, so how do you determining at what price is your analysis (or the Sqwaks) wrong?
To Pipccess and Beyond
  • #168
  • Apr 2, 2018 9:11am Apr 2, 2018 9:11am
Quoting forexin101
{quote} Could you talk about your thought process behind placing a SL when it comes to doing a fundamental trade? As I am assuming a SL is there for you to not only manage risk but also tell you that your fundamental analysis is wrong, so how do you determining at what price is your analysis (or the Sqwaks) wrong?

When trading a risk event the stop loss is normally 40 pips as the candle can fly up and down sometimes when traders are interpreting the information. The trade can last 10 min to a couple of months depending on how strong the information is. A risk event could ecb minutes for example or a pretext release just before a president of a central bank speaks. Nfp is also a risk event for example.

When trading a fundamental trade you're normally looking at a 100 pip stop loss but bare in mind your point of entry plays a big part when setting a stops sometimes.

I will give a trade example:

If you look at usd/cad from June to September 2017 you will see a very strong down trend. The down trend started all because the bank of Canada said they were very much likely to hike interest rates (very powerful fundamental hiking rates is). If you had caught the entry at the time of hearing the news you could have made like 1700 pips if you rode it to September or you could have got some form of a pull back and set a 100 pip stop loss with a 2% risk of the account. I say 2% if you'e looking to swing trade it but if not you could risk more as long as it's in a shorter period of time to avoid sentiment news.

When hearing the news you need to be able to calculate how powerful it is. Remember there is a difference between sentiment and fundamental analysis.

Sentiment can be major news but not have a fundamental affect. An example is let's say trump sacks an important member of his staff then the dollar could weaken for maybe a session or 2 and then retrace.

Let's say the bank of England cut rates or say they will certainly cut rates then you're going to see the pound in a down trend for a considerable amount of time as investors would be looking to run elsewhere.
  • #169
  • Apr 2, 2018 10:33am Apr 2, 2018 10:33am
Quoting Samson85
{quote} This is fantastic to read. Some traders don't even look at the calendar which almost dazzles me and they wonder why they lose money. Cpi, GDP and employment can move the market over 100 pips easily and even carry on until the next day depending on how big the deviation is from the forecasted result. I know a guy who lost 40k in the matter of seconds because he didn't consider the cad cpi result which is probably the most powerful on the market (When nafta isn't around). Options is something I want to consider as I get told it's alot stress...
If you want to learn rapidly futures options trading, there is a good free strategy simulation tool provided by CME
http://www.cmegroup.com/tools-information/quikstrike/strategy-simulator.html
For basic information on future options CME also provides a free course:
https://institute.cmegroup.com/markets/fx

Wish you all the best.
Practice makes a person perfect
  • #170
  • Apr 2, 2018 11:58am Apr 2, 2018 11:58am
Hi all,
After a long time of a technical based approach and disappointing results, I'd like to see if incorporating fundamentals will improve my trading.
I have a question regarding fundamentals since I'm not too sure of this side of analysis:
I was watching a video and the trader mentioned that news trading revolves around the rhetoric of the central banks. He said that banks will have a primary objective, i.e. the primary objective of central bank XYZ for the next few (months/years) is employment data, so when interpreting the news and trying to gauge market sentiment, one should place greater importance around data that relate to employment as these will be the most influential factors to the decisions of the bank. I would simply like to know I can be in the loop in terms of what the primary concerns of the bank are at present.

Hopefully that makes sense. Thanks!
  • #171
  • Apr 2, 2018 2:15pm Apr 2, 2018 2:15pm
Quoting wannabebig
Hi all, After a long time of a technical based approach and disappointing results, I'd like to see if incorporating fundamentals will improve my trading. I have a question regarding fundamentals since I'm not too sure of this side of analysis: I was watching a video and the trader mentioned that news trading revolves around the rhetoric of the central banks. He said that banks will have a primary objective, i.e. the primary objective of central bank XYZ for the next few (months/years) is employment data, so when interpreting the news and trying...

Try forexlive.com (https://www.forexlive.com/) and fxpro.co.uk (https://www.fxpro.co.uk/) for their free ranaqwuak service, there are others I'm sure the community can point you out too, but for starting off in the world of fundies (just as I am), these two places are a great starting point
To Pipccess and Beyond
  • #172
  • Apr 2, 2018 6:22pm Apr 2, 2018 6:22pm
Quoting forexin101
{quote} Try forexlive.com (https://www.forexlive.com/) and fxpro.co.uk (https://www.fxpro.co.uk/) for their free ranaqwuak service, there are others I'm sure the community can point you out too, but for starting off in the world of fundies (just as I am), these two places are a great starting point
Thanks for that, I'll definitely check out that free squawk service. I actually found out the answer to to my question while reading around some blogs etc.

Preface: I realise this is a pretty elementary post for more seasoned traders but this information was pretty helpful to me so I figure another noob like myself could find value in it.

I was mainly wanting to know how a trader can know what the priorities of a given central bank are at a given time. Note that central banks will normally identify an issue within a given sector of the economic infrastructure, and they will focus their short to mid term efforts on addressing this issue via rate adjustments or QE.

The result is that data releases relating to the identified issue will have a greater impact on market sentiment than other non-issue related data releases.

The reason why this happens is because each data point relating to the priority issue will have certain implications for the course of action of the central bank.

Let's take a hypothetical example:
1.The National Bank of ABC has identified that inflation is a growing concern, in their latest conference they have made statements indicating that a rate hike will take effect if inflation continues to rise.
2. The market is now heavily focussed on inflation data, based on the statements of the central bank.
3. Inflation data is released, inflation is higher than expected -not a good sign for the ABC economy, however the ABC currency strengthens and rallies off the back of this seemingly bearish data release. If you're anything like the old me, you'd use this as evidence that trading the news is wishy washy and 'unreliable', but that's an opinion formulated on ignorance.

The reason why price in this situation rallied in spite of weaker economic indicator data is because of how the data will be interpreted by the central bank, and what that will ultimately lead to. In this example we know that a rate hike will follow if inflation continues to increase, so worse inflation means we are closer to a rate hike, and therefore closer to an appreciating currency! Bulls pile in in anticipation of a rate hike.

So this just illustrates the importance of knowing what exactly the central banks are primarily concerned with, so that we can act off the back of the most relevant data releases.I found that this information is released by central banks in their regular statements, and is interpreted by Bloomberg, Reuters etc as a breakdown article. Super helpful for a beginner such as myself.

I would also like to say that I am a beginner and in no way am I an authority on trading fundamentals etc and I could VERY well be wrong on several points here, so any corrections or deeper insight from a more experienced and more knowledgable fundamental trader is appreciated here. Apologies for any mistakes.


TL;DR- Economic data in context is key.
  • #173
  • Apr 2, 2018 7:40pm Apr 2, 2018 7:40pm
Just want to add my 2cents and I know its already been posted but the real truth is you do need both. It also depends on the TF you use. The understanding of fundamentals is necessary because any unexpected news can disrupt Technical analysis. On the flip side, when news comes out as expected it is useless because it was already factored into the market so you can continue on with your Technical analysis. Any information that can help you get an overall and informed view of the market is useful.

As an example look at the chart below. Who new the CHF would do what they did. If you are not paying attention to what News announcements are coming out, you get whacked.

Before that point, the second screen shot on the USD/CHF, it was nice steady 8 month up trend that had some underlining fundamentals to it but to stay the course it was a technical play.

Just my 2cents & Best of Luck

-Ric
Attached Image(s) (click to enlarge)
Click to Enlarge Name: CHF Drop.png Size: 81 KB
Click to Enlarge Name: CHF trend.png Size: 75 KB
Be humble or get humbled
  • #174
  • Apr 2, 2018 8:26pm Apr 2, 2018 8:26pm
Quoting wannabebig
{quote} Thanks for that, I'll definitely check out that free squawk service. I actually found out the answer to to my question while reading around some blogs etc. Preface: I realise this is a pretty elementary post for more seasoned traders but this information was pretty helpful to me so I figure another noob like myself could find value in it. I was mainly wanting to know how a trader can know what the priorities of a given central bank are at a given time. Note that central banks will normally identify an issue within a given sector of the economic...
Hi wannabebig, thanks for the valuable sharing about how to study abt fundamental. Could you please share to me on the good sources (blog, posting etc) for me to drill further on fundamental analysis. Am a kind of long-term/position trader, and interested to incorporate the fundamental in my trade. Tq
an attempt of compounding, from USD50+25bonus until ....burnout..haha
  • #175
  • Apr 2, 2018 8:27pm Apr 2, 2018 8:27pm
fwiw...
i am yet to know of a long term profitable trader (and there are very very few of them) who uses only one discipline.

lets say the disciplines are roughly: technical analysis, fundamental analysis, and market indicators (price action).

All of them use all three, and in amongst that lot there be a small area that they consider to be their edge.
Their trade decision will always start with that edge and then the other disciplines will be taken into account to narrow down the trade.

And no, money management, trading discipline etc are not an edge. As important as they are, they are requisite risk management skills.

An edge is what motivates one to buy/sell better than everyone else the majority of the time.
  • #176
  • Apr 2, 2018 8:43pm Apr 2, 2018 8:43pm
the teach must be used on the fundamental report , not on any chart at all ....

and ofc fundamental create the movement of the chart of all kind ....
  • #177
  • Apr 3, 2018 3:10am Apr 3, 2018 3:10am
Quoting haikanoz
{quote} Hi wannabebig, thanks for the valuable sharing about how to study abt fundamental. Could you please share to me on the good sources (blog, posting etc) for me to drill further on fundamental analysis. Am a kind of long-term/position trader, and interested to incorporate the fundamental in my trade. Tq
I like jarratt davis' stuff for fundamental analysis insight.
  • #178
  • Apr 3, 2018 9:37am Apr 3, 2018 9:37am
Quoting wannabebig
{quote} I like jarratt davis' stuff for fundamental analysis insight.
Jarratt davis is for sure the #1 coach for fundamental analysis as I am with his school as well.

He simplifies it very well and his course is very good. Once you know how to understad sentiment and use a fibanachi for entries them your set.
  • #179
  • Apr 3, 2018 12:29pm Apr 3, 2018 12:29pm
Quoting Samson85
{quote} Jarratt davis is for sure the #1 coach for fundamental analysis as I am with his school as well. He simplifies it very well and his course is very good. Once you know how to understad sentiment and use a fibanachi for entries them your set.
Yeah, the guy is clearly very competent given his Barclay track record and the fact he now runs a fund. Very accessible information too which makes learning this stuff easy.

My technicals are solid after a long time of practice and research into strategy, I found that a mechanical edge based on technicals alone is possible but the edges available in terms of expectancy are normally pretty small unfortunately.

Last few days I've plowed through some fundamental analysis info and it seems pretty simple on a surface level. Everything seems to lead back to central banks and monetary policy. Just staying up to date with the ever evolving fundamental data is probably the hardest part.

Finally now, I need to get to grips with sentiment, which is probably the most important aspect of it all, because if you can't anticipate what the other participants of the market are going to do, you're pretty much a stinkin' loser in forex!

Anyone know how to develop a strong perception of market sentiment?
  • #180
  • Apr 3, 2018 8:31pm Apr 3, 2018 8:31pm
Quoting wannabebig
{quote} Yeah, the guy is clearly very competent given his Barclay track record and the fact he now runs a fund. Very accessible information too which makes learning this stuff easy. My technicals are solid after a long time of practice and research into strategy, I found that a mechanical edge based on technicals alone is possible but the edges available in terms of expectancy are normally pretty small unfortunately. Last few days I've plowed through some fundamental analysis info and it seems pretty simple on a surface level. Everything seems to...

You need access to a quick news feed.

Forexlive.com is free. So if you go on there site via your mobile you can subcribe and receive free alerts about news.

Ransquak is is very good but you have to pay.
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