can a person totally ignore fundamentals?

I am wondering, does a person need to learn about any fundamentals in trading? Can a person strictly trade on technicals? I'm curious what others think. If I am bullish on the Euro, do I need to at all look at Europes economy, interest rates, or anything else that would effect the value of the Euro?

I don't think I do need to study about that. I really don't. If I am looking at my charts and can place my S/R lines on there and find the patterns that have been working ever since trading started. Why do I need to learn about the "why did it do that?" part? When it comes to news, the whole truth is never told. Certain parts are twisted and made to sound the way the person telling the story wants you to hear it. So much of the news can be turned into something that it really isn't in all reality. Why would I want to look at these outlooks and reasons for why price is moving one way or the other?

If I am wrong someone please step in and correct me.

I think you're right in your assessment that you don't require the news to place those trades. I like to look at it simply as an engine of what could happen to price as it moves around: IE, this news could be the catalyst that will push this pair up through resistance.

Obviously, there are other people who trade the exact opposite. They could never look at a chart, just look at the data and decide to go long or short and then exit their position when they feel they've hit a certain target.

It just depends really. I think most people tend to mix the two to varying degrees, but I certainly agree that it can be done on a wholly technical basis.

Edit: It's also good to see you posting again.

Well...

I think it depends on timeframe. If you're trading intra-day, it won't have a tremendous effect since price will already factor all of that in.

But changes in fundamentals, like interest rate, certainly impact things. Look at the way price ran up in anticipation of the fed interest rate announcement. So as much as it can be predictive, sure, use them. I think the general "cycle" of things is more important than specific fundies tho. Knowing that the fed is in the tail end of it's loosening and should start tightening soon, for instance, is pretty useful.

But yea, I think they're only useful in as much as they're predictive, otherwise what's the point.

This shows how much I follow the news. The interest rate today was suppose to be a raise for US right? If that is right, why did US dominate today? The interest rate had no change when it was expected to be raised. Why are people buying US more at the moment and selling other currencies?

Without knowing anything about what news is coming out, looking at USDJPY, if that price can hold I am very sure it is going higher. When I mean hold I mean, retracing back to the prevous resistance level seeing if it is support. When and if support is established, I know that when that newest high is tested and broke for a newer high, longs will be in more profit. I don't need the news at all to tell me what the charts are already telling me.
I love analyzing this stuff.

Thank you Jedi, it is good to do some posting every once an a while. It is just hard to come up with things people already haven't said or starting new threads. I try to stay away from reading too much stuff here. There is so much valueable stuff here to read I know that. I read quite a bit of it. I know how my mind works though. I can be persuaded easily sometimes. I am very bullish on this pair or that pair. I start to read a few posts and it starts to make me think I may be wrong. I hesitate at the wrong time cause I am wrong according to what someone else says. I get home from work and see I was totally right.
That is what has happened so far with USDJPY. I have been bullish since around 102. How things have gotten this far is a long story and I won't get into that here. I just know that if I would have stuck with my original plan, I would be over 700 pips in profit already and a whole bunch of interest.

Was yesterday, and people expected it to stay the same. The question was whether the statement would be hawkish (against inflation) or dovish (against raising rates). I think we got exactly what we expected, coupled w/ good economic data and DOW performance, we're seeing dollar strength. There wasn't much correction after the announcement, telling us things were on target before the announcement.

Anyway, all of this can be predicted by just looking at the rates of change for interest rates over time. Major currency cycles happen as monetary policy cycles and economic cycles go 'round and 'round.

So yea, you don't need to track any of this data really. Price will tell you as it happens. But I think it helps to watch the cycles change so you're better prepared for breakouts as they happen. I've been holding the same euro and cable shorts since last week, partly because of my expectations of a changing cycle.

And my dumbass self already bailed out of two choice entries on cable and yen...So stick to your guns and don't fold in easily. This is what you get for ignoring chart patterns as well.

(Was short at 1.9810 on cable and long at 108.30 on yen, took profit on both, but way too short)

Yeah, I teaching myself to ignore the amount of pips on a trade I have and look at how much farther it is going before it is gonna turn.

Here is an example for me of not sticking to my guns. Go to gbpjpy weekly chart and look at the perfect head and shoulders it made and did exactly what they usually do. When price was around 241 (making the right shoulder), I was certain that is what was gonna form was a head and shoulder. Well, from the tip of the right shoulder to the bottom of the drop was close to 5,000 pips. And I could see it happening as well even before it happened. When price was around 240, I told this one guy, his name was Dave, that GPBJPY would drop at least 3,600 pips. I was certain. And guess what, I didn't make a single pip on that whole move. Ya know, I may not have made a single cent on that trade and it doesn't bother me. I learned a valueable lesson with that.

Rabid made the most valid point as per the question.....no 1 announcement is going to change the long term outlook for a pair......but if you are trading a 5 min chart or an intra day trade....you had better be aware of what news is coming out to tighten stops and protect short term pips....personally I believe long term price action is created by human nature and the herding tendencies....not the news.......

One should be armed with all the information that other traders have.

Please forgive my intrusion, it is done only to make an observation.
Strictly technical traders vs the fundamentalists.
It is my belief that to use fundamentals a trader must have a streak of masochism in themselves. Use of fundamentals in decision making generaly breeds all kinds of moral conflicts between perceptions of right and wrong. Many is the time good business decision is overshadowed by these perceptions and trades end up being placed for the wrong reasons.

If you can take a whack on the thumb with a hammer, shake it off and keep going, then fundamentals might be useful to you. If not then stick with technicals, no emotions, no conflict, little pyschological pain. A big trading edge for many.

i not using fundies (funny mentals!)
i trading sehr well without funny mentals

Ignore fundamentals unless you're trading on the monthly time frame. Won't do you a BIT of good.

You dont need to understand the fundamentals if you know how the markets works...

Ya know, that's very funny you say that. I smashed my finger so bad a couple months ago at work. I just lost my nail about 2 weeks ago now. That day, we were short people so there was no break for me. I shook it off and went right back to work.
That still isn't a good enough excuse for me to start thinking about funny mentals

I like hearing the answers you guys are giving. I had no plan at all to start even thinking about using them. It would make things very complicated. Trading in the right direction is easy. Getting out at the right time is the hardest and most frustrating thing for me.

Thank you guys/gals

Unfortunatley the anwser is Yes. You can trade without paying attention to funds.

I normally give the example of Bubbles.

Bubbles are the best example that the fundamentals could not matter for years and when the bubble bursts, no matter what happens... its unstopable.

Ppl here normally like to think about fundamentals for the long run, but they use them to predict 1 or 2 months ahead. Now thats ridiculous, because a real investor do not search for normal stuff. It searchs for booms... or collapses about to happen.

And despite you only need to know about the sentiment of the ppl trading the market, its just good and helpful to know what could happen in the real long run, years from now.

Here's the facts.

USA is the biggest debtor nation in the world with almost 10 Trillion Dolars of National Debt.

10 Trillion is 10 000 000 000 000 $ and is rising at a record pace, not to produce, not to create factories, but to consume, million dolar houses, cars... vacations and imported products.

With the FED bailing out greedy banks, this debt is about to explode and considering the fact that the money is created out of thin air, being printed everyday, the inflation will pick up eventually to scary double digit values.

When that happens the long term interest rates will get very higher, maybe double digit also, and when that happens America will get a painful recession that may last for years. It will impossible to pay the debt.

In the beggining, like its happening now... the Dollar will correct because the market will look at the rising rates as a good thing. But when China and Japan, who hold 2 Trillion, lose faith in the USA to pay his debt. There will be a severe portfolio ajustment, and when they stop acepting dollars and lending money to the US it could tank the USD to a spiraling fall, much horse than anything we saw until now.

Americans standard of living will get an incredible tumble. Companies linked to retailing will get bankrupt across the board. And by the end of that the Dow can worth 1 or 2 ounces of gold. This means... the Dow could worth 5000 and also the gold, or, if it manages to stay high considering hyper inflation, the gold will be near the same.


And even if this wasn't enought...

USA has about 50 TRILLION dollars in unfunded liabilities of Social Security and Medicare.

Yes you read me right 50 trillion is the money that USA has to pay to ppl retiring in the next 20 to 40 years, and they medical care.

This means hundreds of thousands of dollars per every house hold in USA which means an unavoidable 100% rise in Taxes to compensate and assuming that ppl stop pilling up in the debt.

As i said, this will not happen tomorrow. We don't know for now, but the dollar can correct for a few months, maybe until the end of the year, but eventually the house of cards will start to fall.

Keep in mind that the debt i told you is around the same as the GDP, and also that the americans have a negative savings rate in average.

This means that they borrow more that their own salary.

So assuming that they have to eat... to survive... what comes last? Paying the bills...

Hope this helps. Its not about knowing the inflation 1 month ahead, or knowing about the rate decisions. Is about investing against a collapse or a boom.

But a daily trader, don't need to know this things.

I can only speak from my own experience. I do get away profitable more than 90% of the time completely ignoring fundamental. Just an estimate.

personally i find trying to combine fundamental with TA confuses more than compliment. Thats from a day trading perspective.

Hey Warper,
We all live in a world of paper money. Don't put too much faith in paper as wealth. It is just an entry into a ledger in the end.
Use the paper to buy real wealth that doesn't disappear with the stroke of a pen.
U.S. as a country has all kinds of real wealth, so do other nations.
Just a thought.

strong fundamentals can turn strong support and resistance useless and make patterns meaninless. i dont play with fundamentals in my trading. i always know a good trader that wants to be successful needs to be sound fundamentally and technically.

No. Ignoring fundumentals is plain.. not smart, in my opinion. Unless you're trading 5m charts and below and there are no annoucement soon after or before . Inspecting fundumentals for the next few days can help you in predicting market behaviour and on occasion its local direction as well.