two types of Forex traders

This is how I see the two types of Forex traders: Do you agree, disagree and why?


The Fundamental trader holds to the theory that the Forex market is subject to random (unknowable) fluctuations which make predicting the short term trend impossible. The only way to predict direction is to evaluate the sum of the fundamental indications which drive currency prices over the medium and long term. If one observes enough of these fundamental indicators, one can begin to predict how it will affect the valuation of a particular currency, versus another, in a particular time frame.
The technical traders hold to the notion that the indicators are too numerous and insidious to aide in any prediction: That those fundamental indicators are priced into the markets long before they are made public. The indicators to the indicators are really what drives the market… and those are too complex to be known. The only way to begin to predict this level of complexity: is to observe the data and look for trends, correlations and relationships.

Fundamental trader = A trader who emphasizes economic, political and sociological information as the primary motivator for past, present and future price action.

Technical trader = A trader who believes that all of the past, present and future price action can is primarily driven by certain indicators and or charting methods.

And there is a third type of trader, which is what most Forex traders are: A mixture of fundamental and technical. I seriously doubt that there are too many strictly fundamental or technical traders out there.

Also, you wrote:

“The Fundamental trader holds to the theory that the Forex market is subject to random (unknowable) fluctuations which make predicting the short term trend impossible.”

This is not true, as fundamental traders know that short term trading is highly influenced by news announcements.

"This is not true, as fundamental traders know that short term trading is highly influenced by news announcements."

I consider myself a fundamental Trader at heart because I beleive so strongly in Macro effects. I beleive that current world finacial markets are in such a "pickle" that news announcments are no longer going to be as predictable as they have been recently. any decent economist must see that there is something a little more sinister going on if the US is willing to continue to cut rates in the midst of a probable resession.

Also if everyone knows that the Fed is going to cut rates 1/4 percent is it really a news announcement if every major liquidity provider is positioned to handle to move? (or are we just talking about beating a deal desk for a couple pips on a negative dollar move?) because no bank is going to leave itself exposed in this environment.

btw this is my first post on FF so i thought that the beginners area would be appropriate let me know if there are any threads that a man like myself would find interesting!