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  • #61
  • Sep 22, 2009 5:43am Sep 22, 2009 5:43am
Quoting Razor_trader
I just love a debate. Really there will be 2 sides to this forever as we see it. Fundamentalists and technicalist (I dont think thats a word, but it will do). In the middle there are the people that do both. At the end of the day the only winners are those who see there capital grow, and I will place my life on it that there are players from both sides of the equation that are doing this. As a result im sure they will argue it aswell. The technical chartist will argue his charts hold more info and the fundy trader will argue the opposite side....
Good Summary
  • #62
  • Sep 22, 2009 6:42am Sep 22, 2009 6:42am
Quoting thesnacker
....no wonder all the textbooks and theories say you can't make money use past price patterns.
I don't understand what that means.
  • #63
  • Sep 22, 2009 6:44am Sep 22, 2009 6:44am
Quoting thesnacker
Can you be a great fundamental analyst and still lose money? Can you be a great technical analyst and still lose money?
Yes and yes.
  • #64
  • Sep 22, 2009 6:49am Sep 22, 2009 6:49am
Quoting thesnacker

Can you be a great fundamental analyst and still lose money? Can you be a great technical analyst and still lose money?

Can you be a fundamental analyst and still make money? Can you be a technical analyst and still make money?

No-one has the monopoly on profitable trading strategies, that's what makes this thread so amusing!
  • #65
  • Sep 22, 2009 1:00pm Sep 22, 2009 1:00pm
Quoting thesnacker
...
I beg to differ, I am going to give you a stock example example.

Take stock for a fictional company X...
You are using a fictional example to support your argument, that does not make it more valid in any way.
I don't know what time it is at your place, but right here it's 4:20.
  • #66
  • Sep 22, 2009 1:41pm Sep 22, 2009 1:41pm
Quoting pipmutt
that's what makes this thread so amusing!
Tdion, I can hear you laughing your ass off out there.
  • #67
  • Sep 22, 2009 1:54pm Sep 22, 2009 1:54pm
Quoting pipmutt
I don't understand what that means.
Modern day textbooks and business schools subscribe to this dicotomy

http://en.wikipedia.org/wiki/Efficie...ket_hypothesis

http://en.wikipedia.org/wiki/Efficie...cal_background

In particular where is says weak form efficiency. I was making fun of the theory.




Quoting Vincenzo69
You are using a fictional example to support your argument, that does not make it more valid in any way.
I gave this example.

Quote
BTW I did this on GE last week when my good friend asked about GE on some news about solar panel contracts, He didn't do anything, but I brought up a chart and low and behold, sold at 17.22 which is a LT Price Flip/PPZ/resistance area, TP 16.35. I wonder how many suckers listened to the solar panel brigade on CNBC and bought?????

Look back to October 2008, December 2008, January 2009, 17.22 is a support/resistance area.

Happens all the time, it will happen again.
  • #68
  • Sep 22, 2009 3:35pm Sep 22, 2009 3:35pm
i never said the commentator caused the market to move. schmuck.

Quoting TwoBuckChuck
"trading with fundamentals is the only way to go"

And you think so because someone on CNN said price will move a certain way and it did?

lol.... Classic

Good luck, you'll need it.
  • #69
  • Sep 22, 2009 4:10pm Sep 22, 2009 4:10pm
Quoting tdion
i never said the commentator caused the market to move. schmuck.
I made no mention of the commentator causing the market to move. Read my post again if you're that daft. Also read your first post again and think about what you're saying.

You claim that fundamentals are the only way to go. Yet your basis for this is on what someone said on CNN. Very insightful as to why they are "the only way to go".

Sounds like you're desperately grasping at straws.
  • #70
  • Edited 4:27pm Sep 22, 2009 4:16pm | Edited 4:27pm
it's clear that that is what you were implying.

as for "fundamentals are the only way to go" - they are the only way to go FOR ME. i credited mbqb11 and mike_w for trading for a living with patterns. i could never feel comfortable trading a chart pattern, because i could never get over the possibility of their randomness.

for me, fundamentals seesm closer to a true forecast than a chart pattern.
  • #71
  • Sep 22, 2009 4:34pm Sep 22, 2009 4:34pm
Quoting thesnacker
Modern day textbooks and business schools subscribe to this dicotomy

http://en.wikipedia.org/wiki/Efficie...ket_hypothesis

http://en.wikipedia.org/wiki/Efficie...cal_background

In particular where is says weak form efficiency. I was making fun of the theory.

Nope, I'm still not getting it.

You said "........no wonder all the textbooks and theories say you can't make money use past price patterns....". Are they saying you can't make money so use past price patterns, or are they saying you can't make money using past price patterns?
  • #72
  • Sep 22, 2009 4:42pm Sep 22, 2009 4:42pm
Quoting tdion
it's clear that that is what you were implying.

as for "fundamentals are the only way to go" - they are the only way to go FOR ME. i credited mbqb11 and mike_w for trading for a living with patterns. i could never feel comfortable trading a chart pattern, because i could never get over the possibility of their randomness.

for me, fundamentals seesm closer to a true forecast than a chart pattern.
Hi tdion. As I see it, the only real mover of currencies on a macro scale is Central Bank Interest rates. All of the fundamental reports that come out, in one way or another help to solidify in the collective mind of the trading community, the direction of Central bank rates, across the world. Some are more reliable than others, but it all comes down to rates.

This has always been my opinion. If one is choosing to trade on a macro level, then that is where the study should ultimately be.

If one has a the long term outlook, it is nearly a no brainer that a country with a rate of say %3.00 is like the AUD, is going to increase and a currency with a %0.25 like the USD is going to decrease. So yea, fundies rule the macro world, but only one fundie when it is all said and done; Interest rates.

Nice to hear from you.

Scott
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  • #73
  • Edited 5:05pm Sep 22, 2009 4:50pm | Edited 5:05pm
Quote
If one has a the long term outlook, it is nearly a no brainer that a country with a rate of say %3.00 is like the AUD, is going to increase and a currency with a %0.25 like the USD is going to decrease. So yea, fundies rule the macro world, but only one fundie when it is all said and done; Interest rates.
While I think that interest rates are one of the biggest (if not the biggest), I also think that a country's budget deficit is also a massive factor. Hyperinflation starts with poor deficit management.

I think there's also 2 other factors: Foreign investment and consumer savings habits.

If other nations are investing in a country then that country will see in influx of wealth, their currency will get stronger and the opposing currency (the one being traded in) will get weaker.

A country that saves a lot of money in cash funds will have a stronger currency, a country that saves it's money via market investment vehicles will trade that money for economic growth. While individual orders don't matter to the macro world, the fundamental habits certainly can.

Quote
You said "........no wonder all the textbooks and theories say you can't make money use past price patterns....". Are they saying you can't make money so use past price patterns, or are they saying you can't make money using past price patterns?

The efficient market hypothesis states that everything that's already known about a market is already priced in. Therefore you can't get an edge trading past data, since the current price is correct. There's so many problems with that theory it's hard to know where to start, but I essentially believe the exact opposite: Market inefficiency. I believe the price is always wrong, and that future prices will move to correct it.

I don't believe that changes in price happen instantly, and I don't believe participants are hyper-rational as I don't believe rationality is market efficient. Let me clarify: Prices are where they are now. People believe that the current trend, for better or worse, will either continue or reverse. They will trade accordingly, regardless of what the past appears to show. This will continue until price can no longer trade that way, then it will reverse. A constant series of reversals (consolidation) allows us to establish a sense of "value" and new data comes along to disturb that balance. The cycle continues, changes in beliefs about the market do not reflect instantly but take a while to be priced in. This means the current price is always wrong, future prices will attempt to correct it, and that we're always chasing the perfect market price given what we currently know about the data (but never quite reaching it). Price patterns can certainly tell us what areas are seen in the past as being too excessive, and thus without comparable events, they're unlikely to be breached. Example: Without another major recession event the EURUSD is unlikely to drop below it's yearly low (USD not likely to go above it's yearly high).

If you want to trade fundies then do so. Whatever works for you. Technical patterns certainly can work, the market is not random. The market is very very far from random, one need only look to the distribution of price to realize when and where price has memory (ie: non-random). Fundies work too tho, as long as you have a way to know when you're wrong it doesn't really matter either way.
  • #74
  • Sep 22, 2009 5:05pm Sep 22, 2009 5:05pm
People move the market. Not fundamentals, technicals, interest rates or the moon aligning with the sun.

What causes people to react is infinite. Fundamentals (arguably) play the most significant role in the long term, the million dollar question is when.

Look back to the Aussie last year. Its interest rate was up around 7%. The US was at 1%. Look at the gains the greenback made against the AUD in that time. Fundamentally, the Aussie should have cracked parity and beyond. Technically, a move down was as clear as day.

As to what's better or "the only way to go", the debate is futile. For every competent technical analyst, there's a competent fundamental analyst. And for every technical/fundamental analyst there's another successful trader who uses neither of the two.
  • #75
  • Sep 22, 2009 5:19pm Sep 22, 2009 5:19pm
Quoting TwoBuckChuck
As to what's better or "the only way to go", the debate is futile. For every competent technical analyst, there's a competent fundamental analyst. And for every technical/fundamental analyst there's another successful trader who uses neither of the two.

That about sums it up!

There's only one measure of success in this business and that's profit and the risk it took to achieve it. How it's actually achieved is irrelevant.
  • #76
  • Sep 22, 2009 5:26pm Sep 22, 2009 5:26pm
Quoting Rabid
If you want to trade fundies then do so. Whatever works for you. Technical patterns certainly can work, the market is not random. The market is very very far from random, one need only look to the distribution of price to realize when and where price has memory (ie: non-random). Fundies work too tho, as long as you have a way to know when you're wrong it doesn't really matter either way.
No argument here, I trade both, fundamentals for an overall picture and technicals (patterns mainly) for entry/exit levels. It seems to work ok so far!
  • #77
  • Sep 22, 2009 5:31pm Sep 22, 2009 5:31pm
please, not back to this again. you are making my head hurt.

Quoting Rabid
Technical patterns certainly can work, the market is not random. The market is very very far from random, one need only look to the distribution of price to realize when and where price has memory (ie: non-random).
  • #78
  • Sep 22, 2009 6:29pm Sep 22, 2009 6:29pm
Quote
please, not back to this again. you are making my head hurt.

Laff. Just because they didn't work for you doesn't mean they don't work. The topic of the thread is, after all, "trading with fundamentals is the only way to go."
  • #79
  • Edited Sep 23, 2009 1:35pm Sep 22, 2009 6:30pm | Edited Sep 23, 2009 1:35pm
Quoting tdion
please, not back to this again. you are making my head hurt.
Hey TD, welcome back, it's good to see you posting again.

My 2c worth........

To whatever extent fundamentals (amongst other things) influence price movement - thereby creating trends, cycles, patterns etc - price movement can not be random. Given that 'pure' TA is nothing more than the study of price movement, then, it should be possible to trade profitably using some kind of TA.

Of course all of this is assuming we're not talking Holy Grail, just some kind of workable edge.

Quoting smjones
Hi tdion. As I see it, the only real mover of currencies on a macro scale is Central Bank Interest rates.......
Scott, I can relate to your comment about interest rates being a significant influence. (However, I should point out that my understanding of economics is extremely limited). In the days before the recession, when NZ's OCR increased to above 8%, NZDUSD climbed to above 80c. Simply holding a (long) trade for long enough for carry interest to overcome spread, gave a +EV system; the fact that price also moved north provided a massively handsome bonus. Now I guess that profit can be credited to FA. But even the most primitive TA-based system (e.g. MA crossover, MA slope, channel, or pitchfork) would have identified the ensuing uptrend. Even an idiot like me managed to make some money during that period (Oct 2007 to Feb 2008).

Now let this idiot contradict himself, LOL. The same TA-based system might generate crossovers that result in losses, if/when the fundamental backing is not there. Conversely, when NZDUSD fell from 82c to 49c (Mar '08 to Feb '09), the NZ OCR remained higher than most other nations', so a FA system based solely on interest rate differentials would have 'failed'. However, a suitable TA-based system would have profited by identifying this downtrend. Swings and roundabouts?

I have a broker friend whose experience dates back to his days of trading for Barclays in the late 1980s. His view is that with FA, one needs to somehow ascertain how much of the effect of any fundamental shift (e.g. news announcement) has been anticipated by the 'smart money', and has therefore already been 'priced in'. I guess that's what was meant by 'timing', as was being discussed earlier in the thread.

Not sure whether I've proved or disproved anything, just airing some randomly generated thoughts.
  • #80
  • Sep 22, 2009 6:40pm Sep 22, 2009 6:40pm
even if fundamental analysis is the way to go, you still have to deal with 'timing' your trades. You may have a good analysis, but price will do whatever it wants till it lives up to fundamental factors. And considering you may have less than perfect analysis, you pretty much in the same boat as technical traders when it comes to success..my 20 pips worth..:-P
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