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The fundamental terrorists must be stopped

  • #21
  • Jun 3, 2008 11:26am Jun 3, 2008 11:26am
Since the lies and propaganda ministerium that is the news machinery is running at full tilt already(okay, SLIGHTLY strong wording, ey ;p Still, smoke and mirrors nonetheless) and FF is filling up with yet another misconstrued "it was Ben" myth, here's the actual, real, TRADEABLE reason the EURUSD fell.

We retraced back to former support now turned resistance, made a clear bearish reversal with a Pin Bar and fell. (The pin had formed and closed a full hour before Ben's speech)

I could name both Elliot Wave and another system's reason for the drop, but that's neither here nor there.

You don't need voodoo to trade a chart or a subscription based instant news service or a cool fundamental explaining site with sooooo experienced people.

You just need a price feed and eyes, really.
(Some say they don't even need that, but that's another topic I guess as well)

No flying Spaghetti-Monsters here, just s/r, price action...
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd_80603_4h_pb_not_ben.gif Size: 28 KB
Trust price. Know yourself.
  • #22
  • Jun 3, 2008 12:31pm Jun 3, 2008 12:31pm
Quoting SeekingLight
Since the lies and propaganda ministerium that is the news machinery is running at full tilt already(okay, SLIGHTLY strong wording, ey ;p Still, smoke and mirrors nonetheless) and FF is filling up with yet another misconstrued "it was Ben" myth, here's the actual, real, TRADEABLE reason the EURUSD fell.

We retraced back to former support now turned resistance, made a clear bearish reversal with a Pin Bar and fell. (The pin had formed and closed a full hour before Ben's speech)

I could name both Elliot Wave and another system's reason for the drop, but that's neither here nor there.

You don't need voodoo to trade a chart or a subscription based instant news service or a cool fundamental explaining site with sooooo experienced people.

You just need a price feed and eyes, really.
(Some say they don't even need that, but that's another topic I guess as well)

No flying Spaghetti-Monsters here, just s/r, price action...
Why yes, my vote is already in for seekinglight for president. I read the initial post in this thread and could have sworn you were talking about today until I checked the date and names mentioned in it. I love it that people actually wanted to argue that the drop couldn't be anticipated at all even with the weekly dbhlc along with the 4 hour pin screaming short.

P.S. I don't think I would trade if flying spaghetti monsters were involved. That'd be creepy.
I dream, therefore I become.
  • #23
  • Jun 3, 2008 12:36pm Jun 3, 2008 12:36pm
Quoting SeekingLight
Since the lies and propaganda ministerium that is the news machinery is running at full tilt already(okay, SLIGHTLY strong wording, ey ;p Still, smoke and mirrors nonetheless) and FF is filling up with yet another misconstrued "it was Ben" myth, here's the actual, real, TRADEABLE reason the EURUSD fell.

We retraced back to former support now turned resistance, made a clear bearish reversal with a Pin Bar and fell. (The pin had formed and closed a full hour before Ben's speech)

I could name both Elliot Wave and another system's reason for the drop, but that's neither here nor there.

You don't need voodoo to trade a chart or a subscription based instant news service or a cool fundamental explaining site with sooooo experienced people.

You just need a price feed and eyes, really.
(Some say they don't even need that, but that's another topic I guess as well)

No flying Spaghetti-Monsters here, just s/r, price action...
Laughed in the J16 thread and laughed again here when I clicked the larger picture at the "we don't need Ben" comment.

I had the same problem as Mike in that I read the first post in this thread and honestly thought we were talking about today until I looked at the dates. (Thought I had somehow missed some epic, 2 pages in 1 day Trading room thread)

I read the highlights and understand the basic fundamental sentiment. I believe any full time trader should atleast understand the basics of fundamentals over the long term.

However I base all trades on Technical analysis and couldn't agree more that price can predict the movement with much greater accuracy than any fundamentalist reading word for word Ben's speech.

Keep at the rants Seeking, they're great.
The basis of a democratic state is liberty. ~ Aristotle
  • #24
  • Jun 3, 2008 1:01pm Jun 3, 2008 1:01pm
Quoting Vensik
I had the same problem as Mike in that I read the first post in this thread and honestly thought we were talking about today until I looked at the dates.
I find it very interesting this really happend. It just shows me the usual "explanation rhethoric / true belief" mechanism that's at work here always works in the same way: Rash moves! Quick, a rash explanation! We need external reasons!

The irony is that when a visible chart level goes during non-news time or any other strong moves occur, there's less of an inclination to blame news, as there don't seem to be any nearby(even though I've seen even the most remote headline abused in these cases before, too..it's scary at times).

Oh oh..wait...so you mean these swift, rapid moves are possible...with...out...news, too?

Shocking revelations uncovered! Read it here first!

Someone might eventually even claim there's people manning trading desks and stations during non-news periods!
Worse yet, it may just end up being the traders and orders moving the market, not the news...think of what disaster that would spell!
We'd have to actually look at the same thing(the chart, say) to figure out what shenanigans they'd be up to..

I'm off to gasp profoundly and fan myself some air.

--

Seriously though, very interesting you guys mistook it.

And thanks for the nice words
Trust price. Know yourself.
  • #25
  • Jun 3, 2008 1:13pm Jun 3, 2008 1:13pm
Quoting SeekingLight

I'm off to gasp profoundly and fan myself some air.
My head is trying to make some comment to connect News Trading propoganda to Global Warming propoganda and relate it to fanning yourself with hot air. I think I'm too tired to do it at the moment though, off to my "Before the wife get's home, after London Session" nap.

One thing is certainly for sure, if people would get some chart time under their belts they wouldn't have any problem having their orders filled 2-3 hours before the news. VS watching the speech with fingers on the buy/sell button. There would Certainly be less complaining in this industry if there were less reactionary news traders. See http://www.forexfactory.com/showthread.php?t=79865
The basis of a democratic state is liberty. ~ Aristotle
  • #26
  • Jun 3, 2008 10:47pm Jun 3, 2008 10:47pm
OK-here's a trade based just on a fundamental-

The dollar looks to be weakening over the next few days vs. the Pound and Euro. Reason?

Fed Funds Implied Probabilities. This reflects how the market sees the Fed moving at future meetings. After the GDP last week, there was an 83% chance for an increase at the December meeting. Those expectations got a bit overdone and they came down to around 62% on Friday.

They stayed there on Monday and here's the interesting part-they didn't go up after Bernanke's speech.

Conclusion? Bernanke said interest rates are "well positioned'' to promote growth and stable prices, which means they are at the correct level and unlikely to change for some time. The market see's it that way also, because they are not upping the odds for a rate increase in December.

And as far as your chart on the Euro goes-slap a stoch on there. It looks to me like the "head" area is probably over bought at a lower price then the previous overbought area. That's the same thing as saying that even price has fallen relative to the previous overbought area, the market has judged that price is still too expensive. That's a very very strong indication that price is likely to fall.
  • #27
  • Jun 4, 2008 1:24am Jun 4, 2008 1:24am
Quoting NewstraderFX
OK-here's a trade based just on a fundamental...

...And as far as your chart on the Euro goes-slap a stoch on there. It looks to me like the "head" area is probably over bought at a lower price then the previous overbought area.
I thought divergences were technical in nature, no?

Anyway, I do agree that fundamentals are, well, fundamental. I recall SL used an analogy about how you don't need to know how a car works in order to drive it, but I would argue that when problems arise, even as a driver, it is beneficial to know about the mechanics. As an example, a few months ago I was stopped by a panicked woman with 3 kids, saying she had somewhere important to be 5 minutes ago and her car wouldn't start, and she asked me to pleeeease help her. I sat in her car and tried starting it, and noticed that one of the cylinders wasn't firing, causing the engine to stall almost immediately. I popped the hood, followed the high tension cable from the distributor and found that it had come loose from one of the spark plugs. I pushed it back into place, sat in the car again and it started with no problems. She pleaded for God to bless me and drove away. The point being, it pays to know the fundamentals.

I would also argue that technicals are more important to traders, while fundamentals are more important to investors. Some of the best traders don't know a thing about the fundamentals, and some of the best drivers don't know a thing about how their cars work. On the other hand, some of the most successful investors (Buffett/Rogers/Pickens) form their decisions mainly, if not entirely, on fundamentals - the best mechanic is not necessarily the best driver but he will get you where you need to be even if you have car trouble - a situation that, if it arises, the best driver can't necessarily help you with.
  • #28
  • Jun 4, 2008 6:34am Jun 4, 2008 6:34am
Quoting fierceman
I thought divergences were technical in nature, no?

I would also argue that technicals are more important to traders, while fundamentals are more important to investors. Some of the best traders don't know a thing about the fundamentals
I use technicals when I trade. And who are these "best traders" who don't use fundamentals? Jim Rogers? Bill Gross? George Soros? You think these guys don't use fundamentals?
  • #29
  • Jun 4, 2008 7:29am Jun 4, 2008 7:29am
Quoting NewstraderFX
I use technicals when I trade. And who are these "best traders" who don't use fundamentals? Jim Rogers? Bill Gross? George Soros? You think these guys don't use fundamentals?
Um... How about you read my post before commenting

Quoting fierceman
On the other hand, some of the most successful investors (Buffett/Rogers/Pickens) form their decisions mainly, if not entirely, on fundamentals
I make a distinction between TRADERS and INVESTORS. I think you failed to read that part of my post too. You get an F in reading .

Also, you claimed in your previous post that it was a completely fundamental trade and yet you brought in a technical divergence. You failed to see that in my post too. When you say that a particular trade is based PURELY on fundamentals, as you CLEARLY STATED, well then let's not bring in technical indicators to show us divergences.
  • #30
  • Edited 1:38pm Jun 4, 2008 12:50pm | Edited 1:38pm
So if those names mentioned are investors and not traders-what exactly is the difference? They're referred to as traders in most of the article that I see. I think you are "curve fitting" a definition here in order to make a point.

To my way of thinking, this is what really happened yesterday on EUR/USD:

The chart formation SL pointed out (along with the pinbar) implied a supply/demand imbalance existed at that time. There was a lack of buyers for the euro and more demand for dollars. But the demand for dollars rose dramatically after Bernanke spoke. Certainly, if Bernanke had indicated that rates would need to be lowered again, dollar sellers would have crowded the market, demand for euros would have increased and the dollar would have plunged.

So in essence, the technical indicator showed an area where demand for euros had been weak. And if demand was low before Bernanke spoke, you can imagine how the demand must have dropped afterwards.

Now, if you want to say "here is an area where demand for euros is low, and if something happens to suppress demand further, it's likely to see the euro really take a dive," that makes sense. But unless there is a reason to all-of-a-sudden cause the demand for dollars to increase rapidly, it's not going to happen (at least, nowhere near that fast).
  • #31
  • Jun 4, 2008 1:27pm Jun 4, 2008 1:27pm
SL

What you pointed out, is no fundamental, that is pure noise. Fundamental trading is what NewstraderFX pointed out in the above post.

As I see it, charting is an interpretation of fundamentals, and technical analysis helps you interpret better.

You know how they say it: "it's all in the chart, because fundies make them appear so"
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
  • #32
  • Jun 4, 2008 9:41pm Jun 4, 2008 9:41pm
Quoting NewstraderFX
So if those names mentioned are investors and not traders-what exactly is the difference? They're referred to as traders in most of the article that I see. I think you are "curve fitting" a definition here in order to make a point.
I am not curve-fitting anything. I think the standard definition of an investor is someone who gets into the market using low or no leverage and holds on (often for a long time) until a profit is acheived. A trader is someone who uses higher leverage and enters and exits trades more frequently.

I am not sure which articles you read, but everyone likes to call these guys "billionaire investors", not "billionaire traders". In fact Jim Rogers himself says that he is probably "the world's worst trader". He also says "I've never met a rich technician". This would imply that he uses fundamentals and that he is in fact an investor (as opposed to a trader). He uses a more fundamental approach which makes it harder for him to get the timing right, but rarely fails to get the direction - hence the words "billionaire investor" attached to his name.

In any case, it all comes down to results. If someone is profitable using only charts as their guide, then you can't tell them they need fundamentals. Their results speak louder than anything you can post on the forum. However, these same people (SL et al) cannot deny the usefulness of fundamentals to some, because most of these "billionaire investors" tend to use fundamentals exclusively so there must be something useful there, or they wouldn't be billionaires.

NTFX, I don't know why you are trying to argue with me. I am basically in agreement with you that fundies are useful, I am just trying to say that it's possible for some people to be profitable without them.

I personally think fundamentals are helpful and I like to use them. For those who don't, I wish you the best of luck. I think this debate has gone on long enough.
  • #33
  • Jun 4, 2008 10:09pm Jun 4, 2008 10:09pm
Quoting fierceman
I am not curve-fitting anything. I think the standard definition of an investor is someone who gets into the market using low or no leverage and holds on (often for a long time) until a profit is acheived. A trader is someone who uses higher leverage and enters and exits trades more frequently.

I am not sure which articles you read, but everyone likes to call these guys "billionaire investors", not "billionaire traders". In fact Jim Rogers himself says that he is probably "the world's worst trader". He also says "I've never met a rich technician". This would imply that he uses fundamentals and that he is in fact an investor (as opposed to a trader). He uses a more fundamental approach which makes it harder for him to get the timing right, but rarely fails to get the direction - hence the words "billionaire investor" attached to his name.
Soros used to be considered a trader, when he was more active. T. Boone Pickens is considered a trader. Traders make trades, investors make investments. It sounds kind of daft, but it's that simple to distinguish them. Trading = active, investing = passive.
Never underestimate the powers of the Force.
  • #34
  • Jun 4, 2008 11:24pm Jun 4, 2008 11:24pm
Quoting The Jedi
Soros used to be considered a trader, when he was more active. T. Boone Pickens is considered a trader. Traders make trades, investors make investments. It sounds kind of daft, but it's that simple to distinguish them. Trading = active, investing = passive.
Yeah I agree about the passive vs. active thing. I see it as long term vs. short term, but I think it amounts to the same thing in the end.

As to which of these guys exactly are considered traders or investors I might very well be wrong on some of them, and there is no hard and fast rule anyway. Either way that's beside the point. They all use fundamentals for their long-term outlook on things.

(BTW, a Google search for "billionaire investor boone pickens" returns more results than a search for "billionaire trader boone pickens", so Google says he is an investor )
  • #35
  • Jun 5, 2008 7:20pm Jun 5, 2008 7:20pm
Quoting fierceman
I am not curve-fitting anything. I think the standard definition of an investor is someone who gets into the market using low or no leverage and holds on (often for a long time) until a profit is acheived. A trader is someone who uses higher leverage and enters and exits trades more frequently.

I am not sure which articles you read, but everyone likes to call these guys "billionaire investors", not "billionaire traders". In fact Jim Rogers himself says that he is probably "the world's worst trader". He also says "I've never met a rich technician". This would imply that he uses fundamentals and that he is in fact an investor (as opposed to a trader). He uses a more fundamental approach which makes it harder for him to get the timing right, but rarely fails to get the direction - hence the words "billionaire investor" attached to his name.

In any case, it all comes down to results. If someone is profitable using only charts as their guide, then you can't tell them they need fundamentals. Their results speak louder than anything you can post on the forum. However, these same people (SL et al) cannot deny the usefulness of fundamentals to some, because most of these "billionaire investors" tend to use fundamentals exclusively so there must be something useful there, or they wouldn't be billionaires.

NTFX, I don't know why you are trying to argue with me. I am basically in agreement with you that fundies are useful, I am just trying to say that it's possible for some people to be profitable without them.

I personally think fundamentals are helpful and I like to use them. For those who don't, I wish you the best of luck. I think this debate has gone on long enough.
You're right-I didn't mean for this to get into a debate or anything. Actually, the Jim Rogers quote is that he considers himself to be a very bad short-term trader. Long term-he's very good.

An investor is when a person is investing for their retirement. They're making a steady weekly or monthly investment over a long period of time, with occasional reallocations of their portfolio. Think dollar-cost averaging. They're probably (or should be) using a financial adviser to help them. That person is passive.

A trader goes in and out of the market either short or long term according to what he or she sees. They're active. They make a profit when someone else makes a mistake.

A person can do both, obviously.
  • #36
  • Jun 6, 2008 1:58am Jun 6, 2008 1:58am
Quoting NewstraderFX
You're right-I didn't mean for this to get into a debate or anything. Actually, the Jim Rogers quote is that he considers himself to be a very bad short-term trader. Long term-he's very good.

An investor is when a person is investing for their retirement. They're making a steady weekly or monthly investment over a long period of time, with occasional reallocations of their portfolio. Think dollar-cost averaging. They're probably (or should be) using a financial adviser to help them. That person is passive.

A trader goes in and out of the market either short or long term according to what he or she sees. They're active. They make a profit when someone else makes a mistake.

A person can do both, obviously.
I see a bit of a misnomer with the investment definition. To me an investment doesn't have to be towards retirement, but rather putting capital into a longer term goal, such as building your own business. Retirement does happen to be a longer term goal, yes. A goal which too many people put off for too long (I.E. they don't start until they're 50, when if they started at 25 they could've had twice the assets with half the investment).

A trade has a much more immediate effect. Such as me seeing profit produced in my account after only four days, compared to four years.

As for financial advisors, as someone who works in that field, you have to be careful who you wind up with as some of them lose sight of the concept of quality vs quantity. I'd much rather have 50 high end clients that I've helped get 10% per annum towards retirement than 200 clients who bold face ask me if they've actually grown in any value in the six years they've had their accounts with me.
Never underestimate the powers of the Force.
  • #37
  • Edited 6:56am Jul 3, 2008 6:31am | Edited 6:56am
Once more, half a dozen articles about the ECB.

The really funny / interesting bit is that regardless of the outcome(and any of these discussions), the EURUSD behavior in 10 minutes to me(and it seems to any of those discussing it) is not exactly predictable though, as you can argue tons of sides..

Yet all those articles got a high "USE" vote. So if the "use" of any article is say +16(or +100 for all I care) - what IS the use?
No really.
I mean as in for your own trading. What use does/did it have?
Half the comments of an article counter-argue those prior..
Maybe a higher use score means it's more likely?
So how do I size, +10 I use small risk, +20 votes more...or what is all that..

It's 15 minutes to crunch time, I read through one article which mixes in evil oil speculators as well etc...and I'd still say I'm just as soon expecting a rise as a (temporary in my mind) drop after regardless of what's said/announced in a bit.

I mean, what, either it's already priced in, or there's a surprise, or there's not, or...I mean, COME ON.

This is exactly what I mean with what good is this stuff.

Trading what's tradeable days before(long EURGBP below 0.79 e.g.), fine.
Trading the aftermath on the chart, fine.

Getting any use out of any of the articles or FA?

I just don't see it.

I'm sticking to my "Trading good, articles bad(as in what good is additional conflict)" stance.
Trust price. Know yourself.
  • #38
  • Jul 4, 2008 11:42am Jul 4, 2008 11:42am
The point with fundamentals is that price moves as a result of them because the information is something that a lot of people look at. That doesn't make them easy to use, but here is an example that combines a simple technical view with what happened yesterday vis a vis the euro and ECB:

Nothing is easier to see or more obvious on the chart (which is why it works as a technical indicator) then the daily band EUR/USD has traded in since early May. Price broke out of the band ahead of the ECB as traders bought into the idea that the ECB would remain hawkish (i.e. signal that more rate increases were likely).

Once Trichet nixed that idea at the press conference, traders who were long the euro realized their assessment on future ECB moves was wrong so they covered their short dollar positions as the demand for dollars rose.

In other words, you could have used the fundamentals in this case to identify a time when the market was wrong. When that "light bulb" goes off is when the movement occurs and where the pips can be made.

Your technical entry? How about as price breaks below the upper line on the band. Probability was high that the former resistance would not act as support.

Where to now? While the Fed and ECB remain in a holding pattern, I believe there's a high probability that EUR/USD will stay within the band. For now, price will move up and down within the band depending on how the economic information prints and as hawkish or dovish comments are made.

How long might the Fed and ECB remain on hold is unknown at this time, but with U.S. and European banks still in the process of raising capital to shore up their balance sheets it looks like it could last for a while.

Another thing we can see from using the fundamentals is that markets are "forward looking" mechanisms. One increase from the ECB by itself will not be enough to sustain the euro above the band or allow it to trend up because at this time, no further rate increases are planned. If they were, it's nearly a sure bet that yield spreads between 10 year treasuries and German bunds would widen in favor of the bunds, which for a number of reasons would be very supportive of the euro.

This also sets up a very high probability trade for sometime in the future, because we've already learned how markets will behave under a given set of circumstances. Should the Fed look to be raising rates and indicate that further rate hikes are likely, EUR/USD will break the bottom of the band and likely trend down.

Unfortunately, if or when this may happen isn't known at this time. But when that changes, I'll be sure to post it in the news section.
Attached Image (click to enlarge)
Click to Enlarge Name: euro band.gif Size: 8 KB
  • #39
  • Jul 5, 2008 4:20am Jul 5, 2008 4:20am
I read the nfp report. I could not find a single dollar positive sentence in the entire report. Factor in the ECB hike and fundamentally EUR/USD had no where to go but to the sky. so I traded that. I wont be bothering reading anymore release statements.
BTC Return This Year: na
  • #40
  • Jul 5, 2008 5:34am Jul 5, 2008 5:34am
Quoting SeekingLight

Getting any use out of any of the articles or FA?

I just don't see it.
I really can't understand your quest to fight fundamentals...So what if you can't see it, maybe it's because your lock to your charts, who knows

in the same time you see those articles, I see thousands (if not even more) of all sorts of chartist searching for the "holy grail" in 5ma cross over a 13 rsi chart, with a bearish MACD divergence over the ADX on a 5m tf (should I continue?). Do all these have any value? For me it doesn't, but I don't go on those threads and to start complaining (or make new thread making offensive comparisons). What I do is simply ignore them…

For me, denying fundamentals IS denying the whole macroeconomy. Can you actually think that a pair trended in one way or another for 5 years only because it made a pin bar??? It's pure economy behind those moves, either if you want or don’t

Again, I agree that the terrorist must be stop, but you’re getting the wrong picture who the terrorist really is

Just my 2c
"Abandon all hope, you who enter here" La Divina Commedia, Dante Alighieri
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