Trading news and sentiment with technical analysis

Started this thread as I am looking to develop something I have been observing for some time off the back of my money management process. I don't normally look at technicals but have noticed a specific scenario that repeats.

This thread is open to all and is geared towards mixing fundamentals and technicals. The only rule is your content has to be a mix of the two and not just technical based.

I'm going to kick this off with my observation on the fundamental side and how I plan to approach it. I need to point out right away is I don't normally find and initiate trades using charts. I do however manage trades somewhat technically where i am using a set of rules to guide me to the most optimal exit for the largest majority of trades. I basically sacrifice big home runs by doing this yet it produces greater gains overall. My standard trade setup normally is buy or sell on a catalyst, which is either scheduled or unscheduled news.

My observation is either days with quiet news, like Mondays, I get a read on sentiment and price is agreeing and moving in tandem but, I have no catalyst. More.specifically, on these days the parameters i use to get out of a trade, when reversed and applied to entries in the same direction, i have noticed a great deal of opportunity.

If I can add an extra 2 to 5 percent a month to my existing average then I would consider that a success. My only issue is time. I am able to happily trade news without it absorbing my entire day in front of charts. The benefits of being able to know your trading windows up weeks upfront, i cant tell you how very useful and time efficient it is. Anyway I won't be spending a great deal of time in front of the charts. I will be setting peice alerts and then initiating an entry analysis peocess that will either get me into a trade or let it go.

Monday, the perfect day to kick this off with no scheduled catalysts. Sentiment currently Is risk on with dollar weaker and risk currencies on a stronger footing. As it stands I am looking for an opportunity to short USD but haven't any setup just yet so currently monitoring levels visible on the hourly. The opportunity as I see it now, should USD sentiment shift into positive territory, will be to buy it else there needs to be a pullback for anything to be viable.

Setup in gold

USD weak, price pushed into a confluence zone and couldn't break followed by a breakout in the direction of sentiment. Currently long gold.

Profit booked

Nice to start, let's see if this journey will continue. I will add this to my main strategy after 3 months testing if i can extract 2 to 5 percent a month from it.

sentiment looks to be shifting

sentiment shift, price in a confluence zone and failed to break.

Profit booked

Going to wait for the US session to look for more opportunity. Been a pretty nice start into this so far but i have been seeing this stuff for a long time now so it isn't entirely new just being actioned for the first time.

I use a similar technique, I would like to know which news you consider for your analysis

For this strategy i consider the week ahead and specifically upcoming major releases (in this case it's central bank communication) and daily sentiment flow which in the absence of major news, i base on previous session, whatever news is available that might add some support, and looking at currency strength to identify when sentiment is shifting.

For pure fundamental trading, i have a separate strategy that only reacts to news catalysts (without technicals). The news i focus on here includes core metrics of the economy which is further categorised according to central bank analysis and filtered by sentiment.

trade

US session starting and there is some profit taking leading into that. Sentiment has failed to break this confluence zone and now is pulling back. Without any major news to catalyst price anywhere this should pull back into a range.

Congrats on new thread Eco, following with interest

Profit booked, not much in this one

usdcad trade.

A rather bitter pill for BOC to digest


oil relatively flat


sentiment has failed to cleanly break this major level


strength showing another shift towards dollar strength (albeit within a range)



sentiment on 5 minute showing the same thing as the 4 hour and this is the trade entry

if oil breaks out this will be stopped out

oil push higher stopped the trade out.

That's me done for the day, 4 trades, 3 winners 1 loser, result = profitable day 1

So the trade was right, just unfortunate to have been stopped out by a few pips before fulfilling the setup. This happens and I won't change anything but sure would have been nice to have nailed 4\4 on the first day of testing.

Just an FYI to all. I won't be testing every day, my focus is generally on pure fundamentals, news flow and sentiment - my primary trading strategy. When there is no major news on the day then i will get involved in this thread. Later down the road if this new method qualifies, then i will take it through one more test cycle and that is adding it to days when there is major news. The eventual goal is to have a tool for all occasions and add extra value towards each months pnl.

I do however encourage anyone who already trades technicals with fundamentals to get involved. I might not be trading this method every day but will endeavour to participate in dialogue.

Tomorrow is the FED and market chatter about growth projections being lowered (dovish). There is no major US news on the calendar today and Asia closed muted to lower so no leading guidance into the EU session. There is a risk the market could sit and hang tight until the risk event and there is also a chance the dollar could lean on the softer side. I have taken a long in gold