I need to learn more about economics and how they move markets. where to start? | Forex Factory

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I need to learn more about economics and how they move markets. where to start?

  • #1
  • First Post: Aug 2, 2007 1:11pm Aug 2, 2007 1:11pm
Hello everyone.

Just wanted a little advice.

I have recently been trading the much longer term daily/weekly and I have decided that my knowledge in economics and how they will move the markets is very poor. I want to use fundamentals in my trading decisions.

Is there any good books or web sites that i can learn about this from?

Thanks in advance.
  • #2
  • Aug 2, 2007 1:46pm Aug 2, 2007 1:46pm
Quoting Someone
Hello everyone.

Just wanted a little advice.

I have recently been trading the much longer term daily/weekly and I have decided that my knowledge in economics and how they will move the markets is very poor. I want to use fundamentals in my trading decisions.

Is there any good books or web sites that i can learn about this from?

Thanks in advance.
Yea goto amazon.com, there are a ton of books on fundamentals, you have to pick one that fits your level of understanding though
  • #3
  • Aug 2, 2007 2:03pm Aug 2, 2007 2:03pm
I have not found a book that thoroughly explains economics for the Forex trader. What I have found the most helpful is to write down a list of the major data releases for my favorite pairs and then google all the info I can on each release.
- Keep track of what you learn in a notebook for future reference.
- Log on the website of the data provider whether it be a private or government organization.
- If you are really amibitious make a graph or excel sheet on the historical data and pair response of each data release.
- Also, you have to gauge how the time frame you trade is influenced by economics. For longer term trading no one data release is going to make a pair move 1000 pips.
- Understand how commodities influence long term pair movement (oil, gas, gold, etc)
- Understand how other economic conditions are woven into the picture such as the 10 year bond rate, stock indexes, national debt, etc.

when all else fails google.
  • #4
  • Aug 3, 2007 5:13am Aug 3, 2007 5:13am
If you want to know economics, go to University. They will teach you.
If you want to know about fundamentals, buy some books and read it up.

If you want to know how fundamentals drive the market in the long term you will have to understand how this world runs and where we are headed. It might take you your whole life to study it and you won't have an answer yet.

Don't fill your head with something you don't understand - stick to what you know for sure.
  • #5
  • Aug 3, 2007 8:00am Aug 3, 2007 8:00am
Go to your local library and see if they have:
"On the Wealth of Nations", by PJ O'Rourke.
If they have the Audio version, get it and listen to it several times until you understand what he is talking about. (I had to listen to it for two weeks straight, repeatedly.)

Then you are on your way to learning economics.

I am still not quite sure how to explain this, but I do not think that trading the news is exactly the same as trading fundamentals. I would think that a fundamental approach is more long term and news is just so much noise.
A central bank for instance knows this and so looks at data from a whole month or even quarter, not just a few days.
In trading, there is no bullshit. You either make money or you don't.
  • #6
  • Aug 3, 2007 9:15am Aug 3, 2007 9:15am
Here is a thread worth reading especially for new forex trader.

http://forexfactory.com/showthread.php?t=35982
  • #7
  • Aug 3, 2007 7:24pm Aug 3, 2007 7:24pm
hi...


Not sure if this site has been mentioned in other links refered from here..


http://www.megaone.com/ltinvestor/Tipsonindicators.htm

I have had this a a couple of years now.....gives a easy to understand explanation of some of the bigger US releases.

oh..I did not get it from this site originally, and I noticed a popup...so like most sites caution when visiting...
  • #8
  • Aug 4, 2007 4:11am Aug 4, 2007 4:11am
Quoting Someone
I have recently been trading the much longer term daily/weekly and I have decided that my knowledge in economics and how they will move the markets is very poor. I want to use fundamentals in my trading decisions.
Do you have your opinions about world politics, military power and information(intelligence)warfare? Good! If you aren't, move on with various books, and you'll find some hints to have your opinions. Those who hang in there forever are those who are indepenpent.
Basically, I'm optimistic about prospect for world economy and I like Hayek(Friedrich August von Hayek) and baroness Thatcher's thought.
Peace and Happiness through Prosperity (by Konosuke Matsushita)
  • #9
  • Aug 4, 2007 5:40am Aug 4, 2007 5:40am
Hello
Personally found "Day trading the currency market",by Kathy Lien to have good sections on the history of currency trading and what moves the markets. Not massively in depth, but good all the same.
\Regards
Paul
  • #10
  • Aug 4, 2007 7:02am Aug 4, 2007 7:02am
i'm now reading "Currency Stategy - A practioner guide to currency Trading, Hedging and Forecasting" by Callum Henderson. A part of the book is about fundamentals and economic equlibrium, so I recomandat as a good reading if you want to learn about fundies, and trading in general.

I also notice "What Has Government Done to Our Money?" by Murray N. Rothbard. I took a peak, and notice that is somehow related to economy-policy (and also monetary policy, wich implies currencies). this book is free
http://www.mises.org/money.asp

hope this helped
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
  • #11
  • Aug 5, 2007 12:09pm Aug 5, 2007 12:09pm
Quoting Someone
Hello everyone.

Just wanted a little advice.

I have recently been trading the much longer term daily/weekly and I have decided that my knowledge in economics and how they will move the markets is very poor. I want to use fundamentals in my trading decisions.

Is there any good books or web sites that i can learn about this from?

Thanks in advance.
Take a good economics course at a local college or university. The economics course I took in college seriously opened my eyes in terms of how I look at the world and it really helped me understand how economic news and events can effect the financial markets.
  • #12
  • Aug 5, 2007 12:38pm Aug 5, 2007 12:38pm
Great advice! I would recommend an international economics course and a book to supplement your learning. I will be finished with my course in a few months and would be happy to let you borrow the book. If you trade exotics, a book on third world economics is also advised. Good luck in your quest of knowledge!



Quoting ce_me_flow
Take a good economics course at a local college or university. The economics course I took in college seriously opened my eyes in terms of how I look at the world and it really helped me understand how economic news and events can effect the financial markets.
  • #13
  • Aug 5, 2007 1:18pm Aug 5, 2007 1:18pm
Ahead of the Curve by Ellis is a good, easily understood, inexpensive book on the flow of the US economic system. Contains some surprises. Also has an accompanying web site with the same name that updates the charts in the book... a very nice feature.

This is not specific to forex.
  • #14
  • Aug 5, 2007 2:00pm Aug 5, 2007 2:00pm
Quoting Someone
Hello everyone.

Just wanted a little advice.

I have recently been trading the much longer term daily/weekly and I have decided that my knowledge in economics and how they will move the markets is very poor. I want to use fundamentals in my trading decisions.

Is there any good books or web sites that i can learn about this from?

Thanks in advance.
Good day

One of the most easy ways ,

Technicial analysis will lead you to the fundementals, in other way you can read the action of the market if you are analysing the chart correctly, believe me so many trades I take before the very effective news and I win those trades " using Eliott wave princeples "

Many thanks
  • #15
  • Last Post: Aug 6, 2007 10:34am Aug 6, 2007 10:34am
- Keep track of what you learn in a notebook for future reference.
- Log on the website of the data provider whether it be a private or government organization.
- If you are really amibitious make a graph or excel sheet on the historical data and pair response of each data release.
- Also, you have to gauge how the time frame you trade is influenced by economics. For longer term trading no one data release is going to make a pair move 1000 pips.
- Understand how commodities influence long term pair movement (oil, gas, gold, etc)
- Understand how other economic conditions are woven into the picture such as the 10 year bond rate, stock indexes, national debt, etc.

when all else fails google.[/quote]

Great thread to start
This is good advice! as i am doing it as my homework, I trade technically n often fundamentally,,,, I sould understand more about fundamental to keep my back safer... keep it up guys
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