AntiFundamental Journal

My fundamental friend and I are in a challenge. We had an argument about the validity of technical analysis vs. fundamental analysis. I believe that both are important for a well rounded professional trader. You cannot ignore one or the other. They tend to compliment each other more times than not. I do not, however, think that technical analysis is nonsense and fundamental analysis is more predictive in intra day trading which is what my fundamental friend claims.

In fact, I think that while for long term trading (investor style trading) fundamental analysis is probably more important than technical analysis, for intra day style trading, if you stay out of the markets during news, you are not as influenced by fundamentals as my friend thinks. My argument is that if something fundamental does take place and is important, it will be clearly seen it on the charts.

While I trade most of my account on less efficient markets than forex due to my belief that inefficiency is good and market efficiency is bad, I have recently opened an account with Oanda for the first time with $200. Why only $200? The sum is irrelevant to a large extent. It is the percent change of account value that matters in this competition. While I have multiple relatively large accounts with MB Trading, Interactive Brokers, and FXDD, this is my first live account with Oanda. To be honest, their platform plain sucks. The platform's technical analysis capabilities are a joke. Their quotes change waaay too fast. In summary, I am not used to them at all. Until I get use to them, that is the amount I want to play with. My friend is not even using real money (however small). He is demo trading his account with a starting capital of $100 000 with WHC and is trading all sorts of different markets based on his fundamental understand of the market. The time frame or duration of trades is not defined. There are pretty much no rules apart from if you blow the account, you are done. The challenge will last a year or so.

I will be trading intra day. I will rarely, if ever, keep a position over night.

As my account grows and I get more and more used to Oanda's fast pace quotes, I will reduce my leverage and deposit more and more money in the account until I feel a daily round of trading becomes worth my time and effort.

In the initial stage of my plan, my leverage will be extremely high. If I am able to pull through it, as I said, I will increase funds and reduce leverage. I am a defensive trader, which means that I protect capital first and worry about making money later.

I will attempt to update this journal daily with a broker's performance statement. My friend/partner's journal for the challenge is here: http://fundamentaltrader.wordpress.com/

Feel free to comment and/or ask questions.

the way i see it is that fundamentals for the most part do control intra day movement, but ina sense it is irrellevent because you still need technicals to enter and exit, and the smaller the TF you are trading the less fundamentals play a key role in the trade.

Good luck!

Yep.

Statement attached.

I am going to talk about "professional traders" and big shots that know it alls with magical systems that claim returns of multi hundred - thousand percent returns.

I have been unfortunate enough to waste time on these sorts of people. It has taken me a while to learn to separate reasonable teachers from pure ignorance and idiotic ideas.

Let me be very blunt and direct right from the get go: If ANYONE you spend time on following and learning from does not post broker's statement (doesn't matter if demo or live) and states that they have nothing to prove and find it offensive, that person is nothing more than a PURE JOKE. The best you can do is cut the time you have wasted already reading and following and move on to someone real. Most importantly, learn from that mistake and next time you decide someone is interesting to learn from and follow, if that person has not already done so, you should politely ask for proof that what he preaches is more than just need for attention and fame. If you don't get a straight forward answer, and you don't get a result, it should be clear to you that this is a wanna be trader and NOTHING more. Move on.

This applies to discretionary as well as mechanical trading. In fact, it applies to discretionary systems more than mechanical ones. If a system is truly mechanical, get data that goes back a few years and after the first few months of manual back tests, you can determine a system's performance yourself. It is very important to go back a substantial amount of time from current markets because the majority of systems are introduced when a market suits them best. What happens is that they are simply modeling one state of the market (which is may be more heavily trending or ranging) so when the market switches phase (which it always does sooner or later), you end giving up all of your hard earned gains and than some. It may also be smart to test it on other currency pairs than the suggested one(s) if for nothing else, at least to know under what sort of setups the system fails.

Why do I say this? I say this because time is valuable. There are people who babble about you will have your whole life in front of you to learn to trade. I say nonsense. You have to learn to trade as soon as possible. Otherwise, you will beat around the bush, lose money and eventually probably enter a semi-depressed, glassy state between trading obsession and fuzzy reality. Time is precious because it is finite. Spending it on idiots is an utter waste of life.

So we have covered the "leaders". Now let's talk a bit about the followers aka Yes men! Yay sayers! etc... Real traders don't need a fan club and groupies. Instead, they thrive on meaningful insightful constructive input and criticism. Unfortunately such input is hard to find. This is why most real traders don't disclose their strategies and don't hang around forums answering mass publics' silly questions which tend to repeat over and over again.

What you end up having is closed private trading groups by invitation only rather than 'universities' with qualified students. I am a firm believer that an university can always over take any small private group due to diversity and dept of creativity, talent and ideas.

Statement attached. Again took a single trade today. Starting tomorrow I will over leverage.

A few very quick scalps.

Statement uploaded. I am hoping to have to have a much better Excel based statement with useful statistics done over the weekend.

While I was missing, I have upgraded laptops and took a two week vacation in Japan.

From now on, I will update my statement in this format because I keep increasing my account size. Percent change of account balance is most relevant.

Check this out:

http://www.barclaygrp.com/indices/cta/sub/curr.html

What are your expectations?

Made no trades Sunday. The market WAS a bit skippy.

The Fed and central banks are doing lots of shady business behind the banks of individual investors like us. We are the last to know what exactly is happening and how severe things are.

The market is being pumped forcefully with money so we are seeing quite a bit of volatility. Be careful...

What did I say yesterday about markets being volatile? Things are all over the place. May be prudent to sit on the side lines and see how things line up.

Mid week update.

Yesterday's progress is attached.

I started entering more trades today. As a result I am risking more and hoping to make more. Today was not a good day to increase the risk for me however... I got schooled thanks to Feds pumping money and screwing with the market. Will post weekly results tomorrow.

This past week was a very volatile week. I doubt this coming week will prove any different. Markets are trying to sort themselves after a healthy dose of fundamentals. Fundamentally the U.S. financial system is not as sound as people had hoped. Let's see how all this fiasco finally pans out. Regardless, I am going full steam ahead with my system. I expect to regain all losses I had last week and than some.

Let's see how it works out.

I've attached weekly and daily charts below.

Good day so far. Will post daily charts in about 7 hours.

Good gains for the day... Let's hope we can keep it up for the entire week.

Not happened today balance wise, but I have a bunch of positions floating negative. I think they'll work out...we'll see.

Little action today...

IBFX screw up:

Can't attach a screen shot for some reason...look at IBFX NZDJPY H4 chart...