Is Fundamental Analysis Really Useful For Forex Trading? | Forex Factory

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Is Fundamental Analysis Really Useful For Forex Trading?

  • #1
  • First Post: Jan 24, 2019 7:57am Jan 24, 2019 7:57am
Hi there,

I just finished watching a course by Anton Kreil called "Professional FOREX Trading Masterclass", the course is mostly focused on fundamental analysis (80%) using spreadsheets and govt data to form a bias. I thought it was interesting because he uses a scorecard system to give points to each section of the fundamental analysis (endogenous and exogenous), giving it a "technical feel", I always thought of fundamental analysis being very subjective.

On the other hand, forming a bias before sitting down to trade is not advisable, at least is what 100% of the books and courses say. It is also said that the fundamentals are already all discounted on the charts/price. So, in a sense, it sounds like a lot of hard work for not much edge.

Does anyone here use fundamental analysis to supplement technical analysis in their trading? If yes, how you use it? How it affects your decisions? What has more weight?

Are fundamentals only useful for long term investor? If you are a day/swing trader, are you better off focusing on refining technical reading and execution practices?

Cheers
  • #2
  • Jan 24, 2019 10:19am Jan 24, 2019 10:19am
I have also seen some parts Professional trading masterclass. It's rugged but maybe not much helpful.

I have also been to Kathy Lien's Master Forex Fundamentals course. But not much helpful at all.

I am a technical trader. But I don't want to throw fundamental away. Also looking for short & simple fundamental analysis rules.

Regards
  • #3
  • Jan 24, 2019 10:23am Jan 24, 2019 10:23am
Meanwhile you can see Davit's post. Posted today.

What Are the Key Releases?
1. Interest rate decision
2. Retail sales
3. Inflation (consumer price or producer price)
4. Unemployment
5. Industrial production
6. Business sentiment surveys
7. Consumer confidence surveys
8. Trade balance
9. Manufacturing sector surveys

Keep in mind any of these events can be more important then others if that's the only thing in the week.Above are key events.Why is being aware of events help trading?This is like asking why study the terrain before a battle.Its about planning your trading ahead of news and after.Your expectations may not meet but does not mean ignorance is an Edge its not.
I study weekly events for planning my trades but its a loose concept meaning I am not 100% committed before I see how prices move.For example I could not say before ECB Thurs I would sell EU on Sat prior.This would be projecting your bias incorrectly.What is correct behavior is know that ECB is on Thurs and wait to see opportunities to hit. Example both EC and EA hit Pivots tops hours ego and descending now and one could sell until ECB then get out.This is good example of being aware you would be surprised how many traders don't even know ECB event today.Like I said ignorance is not an EDGE

I don't trade news I trade sentiment /pivots and price action.News to me is part of sentiment.Being aware of this helps understanding the market moves.
Over time you will see moves almost predict it with higher accuracy because you are in tune with the market.Takes time and why trading is hard there is no easy steps of 1 2 3.I am not an expert I share what helps me.You laid out your EDGE and rest is probabilities.I know my EDGE.
regards
  • #4
  • Jan 24, 2019 11:59am Jan 24, 2019 11:59am
Are fundamentals always discounted.-no chance
Just look at the pound recently
Its rallied on the back of Brexit news.
This was because Corbyn was saying to the PM that No Deal must be taken off the table
Plus there were some recent strong UK figures and the Fed have now gone neutral
I trade slightly differently nowadays but news and sentiment are critical in this game
There is so much utter crap written about trading
You need to be careful what you read.
Ok rant over
  • #5
  • Jan 24, 2019 12:05pm Jan 24, 2019 12:05pm
Quoting Fader123
Its rallied on the back of Brexit news.
Its rallied on the back of the innocent money, called the dumb money!

the price always follow the money, anything else is just for fishing

no one wins except the secret mafia and their casinos

u don't understand, no problemo

just to let them know!
  • #6
  • Jan 24, 2019 12:15pm Jan 24, 2019 12:15pm
For a day trader, to whom I am assuming this thread is dedicated, capturing or hoping to capture 20 to 100 pips on a single trade, fundamental analysis is redundant, 100%...how could it possibly be useful?

The route to success lies in one's ability to identify and act upon technical patterns on the screen that are repeated, not exactly, but in a way that is recognizable, time and time again. When I see these, the last thing on my mind is inflation or the GDP forecast for the first quarter in a given country, unless of course I am ten minutes away from a major news release that is likely to move whatever I am trading one way or the other, then of course I stay out.

Day trader - TA 100%
FA Sweet FA!
  • #7
  • Jan 24, 2019 12:23pm Jan 24, 2019 12:23pm
I have been trained by 4 institutional traders plus have 3 software packages that identify order flow
So I know an awful lot about different types orders and how most of thre big algos behave.
But its the news and sentiment that drives the market.
This forms the basis of your macro- then you add on the other bits
  • #8
  • Jan 24, 2019 12:47pm Jan 24, 2019 12:47pm
Quoting Fader123
I have been trained by 4 institutional traders plus have 3 software packages that identify order flow So I know an awful lot about different types orders and how most of thre big algos behave. But its the news and sentiment that drives the market. This forms the basis of your macro- then you add on the other bits

What moves the market is the law of supply vs demand, as stated by Wyckoff.

The news serves the agenda of the ones with deep pockets who manipulate it for the price to "jump" over a certain level or to trap the herd in weak positions. It is very crazy if you check the news, then go over to the chart, the vast majority of the cases the prices do the opposite of what the news "forecasted" after a while. So the good news makes the price goes up in buying climax where the smart money sells into the herd, after they finish the price falls leaving the herd trapped.

During the last months I became a VSA/Wyckoff nerd and I gotta say, after studying and trying to make money trading over the last 3 years (after blowing up 3 accounts) the VSA.Wyckoff method is what made everything to make sense for me, how the markets work. I haven't started trading real money again, but I have been making and better yet, KEEPING money in the demo account. Yes I know it is demo but I treat like real, and given that I use only market orders to trade (well, with the exception of the stop loss), I think it is a very good approximation of the real deal, and being able to replay the market using the simulator really speed things up in terms of testing a new knowledge.

I think it is better for a day/swing trader to use FA just to support a long term trend bias and forget about it when day trading, then if the intraday price reaches a long term pivot you know the odds favor the FA analysis.
  • #9
  • Jan 24, 2019 1:02pm Jan 24, 2019 1:02pm
If you know about Wyckoff, then I don't know why ask this question, since he clearly states, that you don't need to watch any news or fundamentals, because they are already priced into the market.

My advice is though, that you should drop VSA and focus only on Wyckoff's teachings and his books.
Price and volume reveals everything. The market moves on supply and demand.
  • #10
  • Jan 24, 2019 1:14pm Jan 24, 2019 1:14pm
Quoting Gauer
Hi there, I just finished watching a course by Anton Kreil called "Professional FOREX Trading Masterclass", the course is mostly focused on fundamental analysis (80%) using spreadsheets and govt data to form a bias. I thought it was interesting because he uses a scorecard system to give points to each section of the fundamental analysis (endogenous and exogenous), giving it a "technical feel", I always thought of fundamental analysis being very subjective. On the other hand, forming a bias before sitting down to trade is not advisable, at least...
Fundamental analysis is definitely better suited to swing trading.

If you're day trading, a great way to refine your entries is to figure out market sentiment for the day and then day trade in the direction of sentiment (when its clear).
  • #11
  • Jan 24, 2019 1:34pm Jan 24, 2019 1:34pm
Quoting Darastonius
If you know about Wyckoff, then I don't know why ask this question, since he clearly states, that you don't need to watch any news or fundamentals, because they are already priced into the market. My advice is though, that you should drop VSA and focus only on Wyckoff's teachings and his books.

It is just that I love trading and all things related, just looking for ways to improve trading, always learning. I just got carried away by the fundamental analysis in this course because it made sense. And he uses the spreadsheets with charts and all very technical, I felt drawn to it. And also, in our modern complex world of today with currency wars and stuff, perhaps there could be some benefit from FA, just wanted to know people with experience in Forex FA mixed with TA trading.

Why you say I should drop VSA? I find astonishing how all principles work, sometimes is hard to believe. But I mean, I really just look for springs in an uptrend and upthrusts in a down trend, if they match with low volume then I don't even think twice... Every time market leans against structure I check the volume, I use the weis wave showing the average volume of waves (which shows the true power of the move, as stated in TIm Ord book about volume). I also use composite TPO charts to check where the market is in the auction process, and the currency strength meters, when all line up it is a perfect trade. Recently I started using ADR/ATR to filter bad trades.
  • #12
  • Jan 24, 2019 2:12pm Jan 24, 2019 2:12pm
Your vision of FX trading is very complicated.

Really it's very simple:

FA tells us if we should BUY or SELL,
TA tells us WHEN to send the orders.

Everything else is just patience........
ANCORA IMPARÒ
  • #13
  • Jan 24, 2019 2:43pm Jan 24, 2019 2:43pm
If following Anton Kreil approach of fundamental analysis, how would you guys gauge the strength of the euro, fundamentally? You can't perform the endogenous analysis using the data of only one country, and using all countries would make it extremely convoluted. How to assess/analyze GDP growth, the PMI, interest rate, and several other parameters he uses in his scorecards to come up with a bias?

Unless there is like an european data source that merge all this data into one, I can't see a way of doing it... To measure stock market returns/wealth to gauge the euro, what exchange to use? Euronext, DAX? This is the hardest part, going after the right sources of data to update the spreadsheets.
  • #14
  • Edited 4:09pm Jan 24, 2019 3:07pm | Edited 4:09pm
Really good to see that someone want to learn....I am always learning
I look over a number of months to gauge a trend - and then see if there are any likely changes ahead- and then if you see something start to move
Also certain indicators act as bellweathers - (ie - housing)
For Europe I just try and get a general consensus
Central banks interest rate bias is really important- so I would read all the cash rate statements
Note what they consider important and if traders are talking about it.
Really its about focusing on what institutional traders are looking at.
So have a read of Bloomberg, Reuters, PoundSterlinglive
Jarratt Davis has some free stuff on you tube are a good place to start learning about FA
This is pure FA- nothing wrong with it at all just to let you know its a lot of work.
Its good to be open about things- however, you have a good handle on upthrusts and springs - so be careful to keep these in your routine.
  • #15
  • Edited 4:28pm Jan 24, 2019 4:16pm | Edited 4:28pm
Sorry to say but yes, If you want success you need to learn fundamental and daily sentiment.

Price action charts alone are very nice and easy but frustrating and a bit of a guessing game, without fundamentals you are basically kidding yourself, and will always trade against the main players without it.

Fundamentals are difficult to understand at first but worth it.

more info here

https://www.forexfactory.com/showthread.php?t=566887
  • #16
  • Jan 24, 2019 4:30pm Jan 24, 2019 4:30pm
I was looking into EUR, GBP and JPY to find some sources of data to start building their versions of endogenous drivers analysis spreadsheets, here is some nice info of where to get the data:

https://www.cashbackforex.com/en-us/school/tabid/426/ID/437470/yen-economic-indicators#confidence

https://www.fxcm.com/insights/top-economic-indicators-for-the-japanese-economy/

https://www.investopedia.com/articles/forex/11/five-reports-affect-the-pound.asp

https://www.investopedia.com/articles/fx/11/5-reports-fx-traders-use.asp
  • #17
  • Jan 25, 2019 3:40am Jan 25, 2019 3:40am
Quoting venividivici
Sorry to say but yes, If you want success you need to learn fundamental and daily sentiment. Price action charts alone are very nice and easy but frustrating and a bit of a guessing game, without fundamentals you are basically kidding yourself, and will always trade against the main players without it. Fundamentals are difficult to understand at first but worth it. more info here https://www.forexfactory.com/showthread.php?t=566887
omg!
first time in my life that i meet a successful trader online ! wow

mr successful funda trader can i copy ur trades with 50% profit share ? it can be 80% profit share if you want, i dont mind making even a dollar daily without losing all in some point

ofc i already know the answer,
when it comes to copying their trades, they will all shut down their imagination to lie core

so always ask for that, copy with profit share

cheers
  • #18
  • Jan 26, 2019 11:36am Jan 26, 2019 11:36am
Personally, i feel that its the events and economical reports updates that fuels the strengthening and weakening of the currency. and it seems that news seems to be lightly slower then those large institution by 5 - 15 sec. so by the time the news is out to regular traders like us . the market has already moved.

was wondering whether you guys can share where you get your 1st hand news from ? thanks a million
  • #19
  • Jan 26, 2019 9:30pm Jan 26, 2019 9:30pm
I personally don't trade the news. I do however avoid taking a position around key events in the news because I feel like the broker/mm manipulate the spread to much for my liking. I'm not going to discount anyone who has been successful in trading the news but I believe that anything that has happened and speculation on what will happen is already factored into the price. You can become very profitable if you learn to trade with price action and good money management strategies. Slow and consistent gains is the key to building wealth.
  • #20
  • Jan 27, 2019 3:55am Jan 27, 2019 3:55am
Quoting Himel
But not much helpful at all.
Same experience; although I didn’t use this service! But I guess almost all of the paid courses are not much meaningful as they promised.
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