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forex fundamentals are way too vast

  • #1
  • First Post: Jun 29, 2007 5:48pm Jun 29, 2007 5:48pm
Hi guys

still a newbie to forex, and I m finding I have a hard time with the fundamentals...

once again I m not talking about trading using news...I m talking about understanding how fundamentals affect the general trend for weeks, months, etc.

there are only a couple of things that seem important, interest rate, unemployment, retail sales, NFP, and inflation...but its hard for me to determine how a specific data will affect the currency...

many times when a certain econ data comes out, it doesn't really affect the main trend of the currency...so I ask how do I connect such info like NFP, retail sales, etc with the long term effect of the currency thanks?
  • #2
  • Jun 29, 2007 6:37pm Jun 29, 2007 6:37pm
Quoting xxfunguyxx
Hi guys

still a newbie to forex, and I m finding I have a hard time with the fundamentals...

once again I m not talking about trading using news...I m talking about understanding how fundamentals affect the general trend for weeks, months, etc.

there are only a couple of things that seem important, interest rate, unemployment, retail sales, NFP, and inflation...but its hard for me to determine how a specific data will affect the currency...

many times when a certain econ data comes out, it doesn't really affect the main trend of the currency...so I ask how do I connect such info like NFP, retail sales, etc with the long term effect of the currency thanks?
I think that besides understanding how certain fundamentals affect currency movement it is also important to understand how one piece of fundamental data will influence another one. For instance when the interest rates change there are certain economical events that developed in a certain way (ie inflation) and influenced the change. Once you have all the different pieces you put them together and try to get a picture of what the future rates may look like. But IMO this is not an easy task. It would take a great deal of time and study to get to the level where one could do a good fundamental analysis and even longer for one to be able to turn that analysis into a profitable trading strategy.
Stubbornly persistent
  • #3
  • Jun 30, 2007 12:43am Jun 30, 2007 12:43am
maybe i'm not the an exoert in fundamentals, but just from reading some economics and macroeconomics books I started to better understand fundies.

Try to read as many analysis as you can to make an ideea with what a forex analysist will see
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
  • #4
  • Jun 30, 2007 5:12am Jun 30, 2007 5:12am
Interest rates rule the currency markets. Everything else is secondary, much of it is bullshit. Plot out interest rates for different countries and their currencies for the last 30 years. Bear in mind that money will shift around in anticipation of rate changes, but for the most part, the most amount of money goes where the most amount of money can be made from rates.
  • #5
  • Jun 30, 2007 5:20am Jun 30, 2007 5:20am
Quoting Dopey
Interest rates rule the currency markets. Everything else is secondary, much of it is bullshit. Plot out interest rates for different countries and their currencies for the last 30 years. Bear in mind that money will shift around in anticipation of rate changes, but for the most part, the most amount of money goes where the most amount of money can be made from rates.
i agree totally but shift around the fundamentals can be huge from time to time
  • #6
  • Jun 30, 2007 11:08am Jun 30, 2007 11:08am
The other thing to remember is that even though you may think you know and understand fundamentals, the market still ultimately decides on its own which direction it will move. For instance.....a report is released, should be pro $, but the $ still goes down. Sometimes there is no rhyme or reason to it.

Although I do trade during fundamentals, I could honestly care less what the report is or what is expected. To me, trying to predict the results or outcome of a report is no different then trying to be a fortune teller. Why even try?

All I need to know is that there is going to be a report released and I wait for the outcome. I have learned, instead, to trade the results of the report.......by waiting for the market to decide which direction it will choose and simply trade with it. This takes out all of the guesswork.......and provides a solid trading oppoprtunity.
  • #7
  • Jun 30, 2007 12:12pm Jun 30, 2007 12:12pm
Quoting ForexCoach
All I need to know is that there is going to be a report released and I wait for the outcome. I have learned, instead, to trade the results of the report.......by waiting for the market to decide which direction it will choose and simply trade with it. This takes out all of the guesswork.......and provides a solid trading oppoprtunity.
I so agree.
  • #8
  • Jun 30, 2007 12:37pm Jun 30, 2007 12:37pm
Hey, I thread where there is sound, reasoned advice.

They do have them here at FF.

One thing I would add although it kind of has been said, and that is - it is not as important what you think the effect fundamentals will have on a particular market. The important thing is what you believe the rest of the crowd believes the effect fundamentals will have. Therefore when it should be $ positive and it trades instead negative I don't care. I go with the direction. There is no "should" in trading. Only what is.
  • #9
  • Jun 30, 2007 1:12pm Jun 30, 2007 1:12pm
Quoting xxfunguyxx
Hi guys
once again I m not talking about trading using news...I m talking about understanding how fundamentals affect the general trend for weeks, months, etc.
there are only a couple of things that seem important, interest rate, unemployment, retail sales, NFP, and inflation...but its hard for me to determine how a specific data will affect the currency...

?
A good book on the economy and fundamentals is 'Ahead of the Curve' by Ellis. There is a website for this in support as well. I got the book from the library first, then decided to buy it. Recommended to me by an active trader, hedge fund manager and economist, David Andrew Taylor. Easy reading and Not expensive either. I have to say I am now giving it a more detailed read.

Lou
  • #10
  • Jul 1, 2007 6:56am Jul 1, 2007 6:56am
i have tried to study fundamentals and technical analysis...and my conclusion is that it is all nonsense. I used to watch CNBC and Bloomberg every day, then i stopped watching it. and now i have made more than 3000 pips in 3 months and i grow my account by 10% per month.

be ur own expert.....
  • #11
  • Jul 1, 2007 8:47am Jul 1, 2007 8:47am
Another making 10% per month.

  • #12
  • Jul 1, 2007 11:37am Jul 1, 2007 11:37am
Quoting Lou
A good book on the economy and fundamentals is 'Ahead of the Curve' by Ellis. There is a website for this in support as well. I got the book from the library first, then decided to buy it. Recommended to me by an active trader, hedge fund manager and economist, David Andrew Taylor. Easy reading and Not expensive either. I have to say I am now giving it a more detailed read.

Lou
If looked a lot after a fundies book, but couldn't find any(intented for forex or stocks) only that why in my previous post i didn't mention any. if you have other books about forex fundies pls tell us.
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
  • #13
  • Jul 1, 2007 12:14pm Jul 1, 2007 12:14pm
Quoting semar
If looked a lot after a fundies book, but couldn't find any(intented for forex or stocks) only that why in my previous post i didn't mention any. if you have other books about forex fundies pls tell us.
The language describing the relationship between forex and fundamentals has become pretty mathematical. If you are up for that (at the senior undergrad/grad student in economics level) , a good book is Hallwood and MacDonald, "International Money and Finance", another is Sarno and Taylor, "The Economics of Exchange Rates".
  • #14
  • Edited 1:37pm Jul 1, 2007 1:26pm | Edited 1:37pm
Quoting iandekoker
and now i have made more than 3000 pips in 3 months and i grow my account by 10% per month
Im sorry but i will never understand this kind of margin. Sometimes i compare this kind of investment to someone having a beach and investing one grain of sand per trade, because that trader believes that even if he is a good or great trader, he can loose the entire beach in a row anyway. Maybe im wrong but let me ask you something...

When you arrive at the end of the month and realize that your losing trades never even got close to 1/10 of the total ammount, dont you get sad to see that you are putting aside tons of margin that you only will be losing if you are really bad.

Lets put it this way. 1000 pips equals 10 percent in your strategy so you have to lose 10 Thousand pips to lose it all. I guess someone with few knowledge and experience can lose it, but i assume you know a little bit of forex so, how the hell someone who knows what is doing will lose 10 THOUSAND pips in a row (assuming that dont even win a trade AND assuming that it wont be reducing the lots invested at the pace that is losing, because doing that we can have 10 000 pips to lose at all time.

Thats wierd. Some ppl gain 100, 200, 300 pips and get 10 percent. Dont you mind to have the insane work to gain 1000 pips in one month and then realize that you only gained 10 percent, who means that if you win few the next month the average will take you rich in decades.

Quoting SunTrader
Another making 10% per month.
Im not saying that he can, im not saying that everyone can, but i just ask...

If you cant or dont believe its possible, what are you doing here for god sake?

Please awnser me, earning 10% profit average on forex its impossible for a good trader?

What does a good trader should win on forex per month? 1 percent?
  • #15
  • Jul 1, 2007 1:33pm Jul 1, 2007 1:33pm
Quoting SunTrader
Another making 10% per month.

Does the little laughing guy indicate your joy for those who can make 10% and more per month?
Same Whore .... Different Dress
  • #16
  • Jul 1, 2007 8:15pm Jul 1, 2007 8:15pm
Quote
Im not saying that he can, im not saying that everyone can, but i just ask...

If you cant or dont believe its possible, what are you doing here for god sake?

Please awnser me, earning 10% profit average on forex its impossible for a good trader?

What does a good trader should win on forex per month? 1 percent?
It makes a lot more sense to talk in terms of yearly returns. How does 100% yearly returns sounds like ? Logical ? Ridiculous ? Impossible ?
  • #17
  • Jul 1, 2007 8:43pm Jul 1, 2007 8:43pm
Look at this way:

Buy a house and you (traditional loan) pay a fixed interest rate and a fixed monthly payment.

Buy a house and you (nowadays) pay a fixed interest rate and fixed monthly payment for the first few years and then you are at the whim of the bond market and how that might affect your rate and payment.

Most mortgages adjust quarterly, some on a monthly basis. Either way that can jump to a much larger payment.

Fixed rate = defined amount

Variable rate = Can grow exponentially

Either loan can be refinanced but with most who might struggle, the variable is the one that will get you. Therefore another way the debt will grow exponentially.

Now flip it back to growing your account by 10% month and you get the opposite result of a variable mortgage. Your money grows exponentially. Great, except as it has been stated over and over again here on FF soon the brilliant trader who accomplishes this will "own the world".

10% in a single month here and there is very possible. Just not forever. 10% yearly although not impossible either is pretty darn good.

This 10%/month figure being attainable is also in reference to more than a newbie $250 account too. Because even the lowest sub in the NBA can step on the floor and hit a mid-court 3 point. Consistancy matters most, with real money, i.e. more than pocket change.
  • #18
  • Jul 1, 2007 8:59pm Jul 1, 2007 8:59pm
Quoting SunTrader

10% in a single month here and there is very possible. Just not forever. 10% yearly although not impossible either is pretty darn good.

This 10%/month figure being attainable is also in reference to more than a newbie $250 account too. Because even the lowest sub in the NBA can step on the floor and hit a mid-court 3 point. Consistancy matters most, with real money, i.e. more than pocket change.
'

10% a month(on avg) is more then doable...and if i was only making 10% a year I would not be wasting my time trading my own account.
  • #19
  • Jul 1, 2007 9:35pm Jul 1, 2007 9:35pm
bassically we already leveraged the price up to 1:10.000 in mini account.

and so the effect of fundamental news is leveraged 10.000 times.
wonder, how can we detect every movement of 0.0001 price (0.01 cent).

do we disturbed that much if a burger is 1 cent more expensive?.
  • #20
  • Jul 1, 2007 10:47pm Jul 1, 2007 10:47pm
Quoting mbqb11
'

10% a month(on avg) is more then doable...and if i was only making 10% a year I would not be wasting my time trading my own account.

OK you go boy, but can you please let me have my own little corner of the world somewhere, huh?

Reminds me of a guy I worked with at one time. The guy said in talking about his daughter: "In one ear and and in the other" And for those who've never heard of the expression it is "in one ear and out the other".
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