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trading with fundamentals is the only way to go

  • #121
  • Oct 2, 2009 8:06am Oct 2, 2009 8:06am
Quoting mikkom
Uhm.. the subprime crisis was kind of obvious, really. What goes up because of huge leverage must go down at some moment.

What wasn't obvious [in fact quite the opposite what I anticipated] was that the crisis started in US and was primarily US crisis but that made USD stronger [for multiple reasons that should now be obvious to anyone interested in fundies].

This is exactly the same thing as coming USD treasuries collapse - very easy to predict but the effects are very hard to predict. I would assume once again that USD will go down hard...
I like your post. I mentioned PPP earlier. This concept has the tendency to hold in the very long run (think of 10+ years), in the shorter run however, the market can greatly deviate from this equilibrium level.

In my opinion this is the problem of pure fundamental analysis: you can analyse whether an asset is over or underpriced, but you can't predict when the market reaches its turning point and starts heading towards equilibrium.

When it comes to the market, there are thousand other factors that drive prices, non of which are included in fundamental analysis. A lot of that has to do with psychology. Bubbles burst, but it is very well possible that you will be stopped out before that happens.
The nail that sticks out gets hammered back in
  • #122
  • Oct 2, 2009 8:31am Oct 2, 2009 8:31am
Doesn't the analysis that a currency is under/over-valued from a fundamental standpoint completely discredit the assertion that fundamental analysis is the 'only way to go' in the first place? Either your analysis is wrong, incomplete or the market doesn't care at that point in time. Fundamental analysis is even more subjective than technical analysis - it all looks so obvious when you look back on it, but were the credit crisis that 'obvious' to part time economists before it crashed, then why didn't it crash before? I've got nothing against any type of analysis, technical analysis isn't my religion and I'm not shouting 'infidels' with a jacket of high explosives around me but fundamental analysis is for highly sophisticated long term investors, not traders. I couldn't care less where the Big Mac index is at when I'm holding trades for 2 or 3 hours.
  • #123
  • Oct 2, 2009 8:41am Oct 2, 2009 8:41am
Quoting Rabid
Uhm, no. Crude is based on supply and demand. As the price goes too high, alternates become more feasible. There's all sorts of crude that becomes viable at $100/bl, and if gasoline gets to $5/gal we're going to see all sorts of new technologies (compressed natgas, methanol/ethanol, electric hybrids, H2) replacing gasoline engines.
It's great that people have opposite views, otherwise there wouldn't be markets.

Anyway, let's just agree that we disagree - I don't want to bet with anyone because that's why the markets exist.
  • #124
  • Oct 5, 2009 5:35pm Oct 5, 2009 5:35pm
who cares about fundi/tecni/or tea leaves.tdion i am just up 5 percent on my account btw.lol u know one need flair in this business not fundi tea leaves/fundi fanatism. nology i like the way u approach or put ur view point.thanks
Allah has permitted trade and has forbidden interest [koran]
  • #125
  • Oct 14, 2009 3:37pm Oct 14, 2009 3:37pm
Forex is easy when you know the reason why you will trade..........And it is not easy to know the reason................But if you use the basic some concepts of Forex about fundamental then you can trade Forex easily.............

I use fundamental in Fx ..............But I also use technical indicators in FX..........But at first I try to know that why I shall go for long or go for short.......That's my trading style.............
And my FX sense with fundamental says that USDJPY is going for a big long trend..........
Now the price is 89.397 if any major change is not done in fundamental of US or JAPAN economy then the PAIR is gonna long and that long will generate huge amount of pips like 1500-2000 but it may take three to four months time...........
Don't think me an expert I am just a learner of FX and fundamental of FX market...........
Regards
  • #126
  • Oct 31, 2009 6:09am Oct 31, 2009 6:09am
Clearly both FA and TA work. There are successful people from each camp: pure fundamentalists and pure technicians. There are also those who successfully combine FA and TA.

However, neither method is worth a dime if you can't control your emotions or if you don't have solid money management.
  • #127
  • Oct 31, 2009 6:44am Oct 31, 2009 6:44am
After reading many posts on this thread, I am of the opinion that fundamentals are fundamentally incorrect and technicals technically not correct. Money management is the winner.
The Thief of Wall Street
  • #128
  • Oct 31, 2009 7:20am Oct 31, 2009 7:20am
And the winner is...
Quoting Chicky
After reading many posts on this thread, I am of the opinion that fundamentals are fundamentally incorrect and technicals technically not correct. Money management is the winner.
My answer would be standard after being asked this question so many times over the years

Who cares.

Trading is all about finding out what works for you. If thats TA FA or which side of bed you get out of in the morning... as long as your on it when it moves and controling your risk when you are in on a movement.

Soros wrote a reaonably good book about FA modelling in the 90's and lots of good books about TA out there... nothing really covers how to apply those models in real time.

Most of the time what makes people screw things up is the last and final hurdle which is your personal psychology and that is a life long journey... some people master it others dont and give up.
  • #129
  • Oct 31, 2009 7:33am Oct 31, 2009 7:33am
Quoting Newtron Bomb
And the winner is...


My answer would be standard after being asked this question so many times over the years

Who cares.

Trading is all about finding out what works for you. If thats TA FA or which side of bed you get out of in the morning... as long as your on it when it moves and controling your risk when you are in on a movement.

Soros wrote a reaonably good book about FA modelling in the 90's and lots of good books about TA out there... nothing really covers how to apply those models in real time.

Most of the time what makes people...
Deliberately left psychology out of this dicussion, fearing not many would agree.

It was difficult for me to control emotions, but accidently found out that my psychology is good if money well under control and within my calculations / financial plan.
The Thief of Wall Street
  • #130
  • Last Post: Oct 31, 2009 9:53am Oct 31, 2009 9:53am
Quoting Dopey
But to follow any analysts is folly. Just google Philip Tetlock. He's a scientist, I'm sure you'll be interested in what he's found out.

Per my other post, the question is simple. Are you a zookeeper or an inmate?
Wow this guy has very wise things to say. I always knew them intuitively i think, great thing that there's actually been research into it.
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