Thanks, Starfire, for your comments.
You make a very important point: "analysis and good trading methodology are almost completely independent variables". I am working on both, but the trading methodology is where I need the most work right now. In terms of analysis, I am boning up on the underlying fundamental sentiments and announcement science, because I believe they tip the scales sometimes when the market is in a "Neutral Zone" or non-deterministic state where it can literally go either way quite strongly. Fundamentals also shape the waveforms, and influence their size. So do technicals.
For several months, years ago, I traded based solely on fundamental announcements. I came to the conclusion that there is no direct correlation between the content of the announcements and the subsequent market behavior. I know now that that isn't entirely true. It's just that the macro-economic sentiments and announcement data are influenced by a variety of contextual factors, and thus have a complex and sometimes muted, delayed and buffered impact on market movements.
For over a year I traded based solely on technicals, and ignored fundamentals of all kinds. But I noticed at times that the market would shoot off in one direction or another at the times of the announcements, which was sometimes, or usually, beneficial, but occasionally harmful. Also, I noticed that sometimes the trends would be ameliorated, and sometimes augmented by fundamental influences. Entry prices would also be effected by announcements. Some announcements produce a short term, modest impact. Others, a long term, powerful impact. Some cause whipsaw effects, which I fully understand now. I realised that announcements and fundamentals do influence the prices in a variety of complex ways.
I know now that the movements of the market are the summation on multiple scales of cycle or oscillation frequency of the fundamental inputs (data and sentiments) combined with Elliott Wave Theory and Q Theory operating on various orders of magnitude. When all of the relevant data are properly factored in, then the movements are entirely comprehensible, and sometimes highly predictable with amazing precision.
The hard part is to know how to sift and sort what is important, and to properly weight and factor the fundamental information into the full wave equation, knowing all the diverse fundamental and technical vectors impacting the final price equation. This takes study, experience, careful observation and practise. Which is what I've been doing the past 6 months.
You make a very important point: "analysis and good trading methodology are almost completely independent variables". I am working on both, but the trading methodology is where I need the most work right now. In terms of analysis, I am boning up on the underlying fundamental sentiments and announcement science, because I believe they tip the scales sometimes when the market is in a "Neutral Zone" or non-deterministic state where it can literally go either way quite strongly. Fundamentals also shape the waveforms, and influence their size. So do technicals.
For several months, years ago, I traded based solely on fundamental announcements. I came to the conclusion that there is no direct correlation between the content of the announcements and the subsequent market behavior. I know now that that isn't entirely true. It's just that the macro-economic sentiments and announcement data are influenced by a variety of contextual factors, and thus have a complex and sometimes muted, delayed and buffered impact on market movements.
For over a year I traded based solely on technicals, and ignored fundamentals of all kinds. But I noticed at times that the market would shoot off in one direction or another at the times of the announcements, which was sometimes, or usually, beneficial, but occasionally harmful. Also, I noticed that sometimes the trends would be ameliorated, and sometimes augmented by fundamental influences. Entry prices would also be effected by announcements. Some announcements produce a short term, modest impact. Others, a long term, powerful impact. Some cause whipsaw effects, which I fully understand now. I realised that announcements and fundamentals do influence the prices in a variety of complex ways.
I know now that the movements of the market are the summation on multiple scales of cycle or oscillation frequency of the fundamental inputs (data and sentiments) combined with Elliott Wave Theory and Q Theory operating on various orders of magnitude. When all of the relevant data are properly factored in, then the movements are entirely comprehensible, and sometimes highly predictable with amazing precision.
The hard part is to know how to sift and sort what is important, and to properly weight and factor the fundamental information into the full wave equation, knowing all the diverse fundamental and technical vectors impacting the final price equation. This takes study, experience, careful observation and practise. Which is what I've been doing the past 6 months.
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