How does one begin to learn fundamental trading? | Forex Factory

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How does one begin to learn fundamental trading?

  • #1
  • First Post: May 14, 2018 4:24am May 14, 2018 4:24am
We see many guides on technical trading. Many books on it. But what about fundamental trading?
I'd like to expand the question to fundamental trading for forex. Because in stocks and to a certain extent certain commodities, there are resources on how to fundamentally trade those instruments. But yet when it comes to forex, none. Nada.

Is there a book, or a website you came across that teaches the basics of fundamental trading - specifically on forex?

I realize this is a big question. You can't just say go pick up a book on economics. It doesn't work that way. I've read the undergrad econs textbook a few times over and it does nothing to help me trade better.
  • #2
  • May 14, 2018 7:03am May 14, 2018 7:03am
This is the only guy I know that likes to trade Forex fundamentally. Not sure if he retired, died, or got wiped out, but here is the link. You might try emailing him and see if he responds. He used to send newsletters with his analysis. In my opinion, it is a dangerous way to trade Forex. Most people straddle, so you get to watch as price spikes both directions to hunt stops. But, it's your money. I left the stock market because I got tired of all the knee-jerk reactions to fundamentals. In Forex, I just target specific patterns through technical analysis and sit out for major news releases. I have only been trading Forex for 11 years though, so you might have a different experience. Good Luck.

http://www.newsprofiteer.com/
You cannot be extraordinary by being normal
  • #3
  • May 14, 2018 7:52am May 14, 2018 7:52am
Don't get me wrong, I make my money from technical analysis. But I want to cover all my bases. Let's just say I like finance in general.

For example, I'd really like to make sense of what the NFP numbers mean instead of just "oh it's below expectation, so it's bad". That's an oversimplification. But it illustrates my point. I would really like to know how everything ties together and how that information can be used to make a decision.
  • #4
  • May 14, 2018 8:25am May 14, 2018 8:25am
"The Federal Reserve and others carefully analyze trends in the nonfarm payroll employment series published by the Bureau of Labor Statistics (BLS). Over time, these data have proven to be an important indicator of economic conditions because they move closely in line with the overall economy and are published monthly on a timely basis. In addition, payroll jobs data are published for a large number of industries; this industrial detail helps the Fed to evaluate labor market and business conditions across a wide array of industries. Finally, monthly payroll jobs data by industry also are published on a timely basis for state and metropolitan areas, so economists can evaluate economic conditions for those regions and make comparisons with other geographic areas"

https://www.frbsf.org/education/

www.bls.gov
POW!
  • #5
  • May 14, 2018 7:09pm May 14, 2018 7:09pm
The best economists get it wrong all the time... What makes you think your better? Just saying I don't think fundamentals are worth trading..
The only system that will work is one designed by and for yourself.
  • #6
  • Edited 10:05pm May 14, 2018 8:24pm | Edited 10:05pm
Quoting bloodpoodle
The best economists get it wrong all the time... What makes you think your better? Just saying I don't think fundamentals are worth trading..
Agree 100%

Fundamentals don't move price. Banks, governments, hedge funds, investment funds move price. Their human behavior, driven by fear and greed, is expressed on the chart.

Personally, my goal is to make 20-30 pips a day. If I do that, I will be living a very comfortable life. I don't care about Brexit, Grexit, Frexit, Texas, Lexus, "Trump"et, or what some muppet on Ransquawk has to say.

Am I keenly aware of what's going on economically around the world? Yes.

Do I know when important news is coming out? Yes.

But the chart is the life blood of my business. Pure and simple.
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Pride always comes before destruction.... -Proverbs 16:18
  • #7
  • May 14, 2018 10:22pm May 14, 2018 10:22pm
Just one of the myriad of FF headlines today relating to the US economy.

"U.S., China still 'very far apart' on trade: U.S. ambassador" - Reuters

"Why it may be downhill from here for the U.S. dollar" -Market Watch

"Trump's top economic adviser doubts the US can seal a new major trade deal with Mexico/Canada" -Business Insider

"Market now pricing in four interest rate hikes this year" - CNBC

"Gas Prices Expected To Lead US Retail" - Market News

"Rising oil prices, once a big negative, may now be 'a wash' for the US economy" - CNBC

"Widening Inflation Differential Between US-EMU" - Marctomarket

WOW!!!

Or, I can just look at my chart and find a trade that extracts 20-30 pips instead of caring what a bunch of paid mouth pieces have to say.
Pride always comes before destruction.... -Proverbs 16:18
  • #8
  • May 15, 2018 12:21am May 15, 2018 12:21am
IMO, a good starting point is picking up a international finance textbook. Or you can just google international finance. They should have a topic or chapter on the various theories of exchange rate determination.
Another good area to look into is macroeconomics.

That said knowing theories isnt enough. These contents are taught in nearly every business school in the world. The question is how do you apply the knowledge and seek exploitable loopholes in the real world.
I look for value wherever it can be found
  • #9
  • May 15, 2018 1:42am May 15, 2018 1:42am
Quoting Expo33
Just one of the myriad of FF headlines today relating to the US economy. "U.S., China still 'very far apart' on trade: U.S. ambassador" - Reuters "Why it may be downhill from here for the U.S. dollar" -Market Watch "Trump's top economic adviser doubts the US can seal a new major trade deal with Mexico/Canada" -Business Insider "Market now pricing in four interest rate hikes this year" - CNBC "Gas Prices Expected To Lead US Retail" - Market News "Rising oil prices, once a big negative, may now be 'a wash' for the US economy" - CNBC "Widening Inflation...
now you pointed out why fundamentals can be nasty , i stood up and clapped my hands together and applauded , back to the charts
people leave, but this thread will go on for ever
  • #10
  • May 15, 2018 4:34am May 15, 2018 4:34am
Quoting Aussi
{quote} now you pointed out why fundamentals can be nasty , i stood up and clapped my hands together and applauded , back to the charts

Yeah, but you have to develop an ability to sort out garbage from genuine analysis. The problem of quantity not quality of content is what we have to learn to solve.
  • #11
  • May 15, 2018 6:32am May 15, 2018 6:32am
Let me put it another way:

I want to think like the central bankers. I want to know how they make their decisions and I want to have an approximation of that kind of knowledge when I trade.
I know the argument that technicals pay the bills. And I do make my money from technicals - but that's not the question I'm asking about ultimately.
  • #12
  • May 15, 2018 6:44am May 15, 2018 6:44am
Quoting thelws
Let me put it another way: I want to think like the central bankers. I want to know how they make their decisions and I want to have an approximation of that kind of knowledge when I trade. I know the argument that technicals pay the bills. And I do make my money from technicals - but that's not the question I'm asking about ultimately.
I highly doubt that anybody here could provide you materials to "think like the central bankers"

What people could provide is references to materials about factors which goes into the central bankers decision... It is up to yourself to synthesize the knowledge and make an educated guess about central bankers most likely next move.
I look for value wherever it can be found
  • #13
  • May 15, 2018 7:20am May 15, 2018 7:20am
I suggest you follow my thread as it is all about fundamental trades.

I post the trades that banks take weekly as well.

Take into account that even the big banks get it wrong or change their minds.

I also show every trade I take in the morning and you'll see the results at the end of the trade. (75% win streak)

Those that say that fundamentals dont move markets are lazy. If they are buying based on RSI or Stochastic then good luck to them!!
  • #14
  • May 15, 2018 11:18am May 15, 2018 11:18am
Quoting Samson85
I suggest you follow my thread as it is all about fundamental trades. I post the trades that banks take weekly as well. Take into account that even the big banks get it wrong or change their minds. I also show every trade I take in the morning and you'll see the results at the end of the trade. (75% win streak) Those that say that fundamentals dont move markets are lazy. If they are buying based on RSI or Stochastic then good luck to them!!
Don't waste your time. Garbage thread just regurgitating what some other paid mouth piece has to say. Zero insight.

If you want to learn something useful for longer term fundamental trading then study COT report analysis
Pride always comes before destruction.... -Proverbs 16:18
  • #15
  • Last Post: May 15, 2018 9:44pm May 15, 2018 9:44pm
Quoting Samson85
I suggest you follow my thread as it is all about fundamental trades. I post the trades that banks take weekly as well. Take into account that even the big banks get it wrong or change their minds. I also show every trade I take in the morning and you'll see the results at the end of the trade. (75% win streak) Those that say that fundamentals dont move markets are lazy. If they are buying based on RSI or Stochastic then good luck to them!!
Yea, head on over to his thread for some copy and paste of what the "big boys" are recommending.

Nothing but losing trades. And to think these muppets get paid big $$$ to help others lose 300 pips. All 3 major trades stopped out. HAHAHA,
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