Is technical analysis sufficient ?

Do you think is the forex negotiable only with TECHNICAL ANALYSIS? Or here is no profitable traders which use only TA without FA?

Thanks

I think all traders should have a handle on FA if for no other reason than macro context. Depending on your strategy, TA alone is sufficient, especially for short term (scalp) trades.

I often look for fundamental events as a catalyst for the technical setups, so I say you're at a disadvantage if you're using just technical analysis.

Think in terms of sports...... Just because a team has won two times in a row doesn't mean they'll win tomorrow, adding a MA to the mix isn't gonna help either. Unless you can figure out why the team won before, there stats(price action) is useless.

Welcome man to world of confusion.

Trading is psychology. Each and every trader has its own method. One trader is using MACD, one trader is using MA, another one is using fib, another one is using intuition...like this millions of traders, millions of trading methods and systems on different TFs.

What ever method you use, your ultimate success depends on how you are able to read the 'aggregate psychology'. This is what differentiates the successful 5% from rest.

Basically, successful traders think differently- Thats the hallmark of their success. It comes with lots and lots of practice.

Focus on 'aggregate psychology'. Dont focus on your trading system because on an aggregate basis, the market does not care about your individual trading system.

The first step is to focus on what markets are doing. What markets are doing right now is 'aggregate psychology'.

I can't for the life of me figure out how to do fundamental analysis on a market this large with infinite variables in it (wars, commodity shortages, interest rates etc., etc. etc.).

I'd rather just take my chances as a chartist than try to figure out how the world works.

If a market is of enough volume 24h / 5 1/2 d, there's so much TA to be had that one can get away with little to no FA.
Sometimes I miss FA from stocks -- Then the feeling goes away.

Probably should not post this, because I really do not want to support a lot of discussion on it, but I am feeling generous today, as it has been an amazing trading year so far.

I use both technical and Fundamental techniques. The way I use FA is a bit down and dirty, but it has worked very well for me over the years. In FX, it is easiest of all to gather FA info. I look at tomorrow's calendar of news events. I compare the previous news number with the project analyst's number and if it is a number that is good for the currency I give it a positive number from 1 to 2 based on whether the news event is high impact or medium impact. I assign a negative number if it is bad for the currency. I ignore low impact events. I just do this with all of the scheduled news events for the two currencies in the pair and then sum them up to decide if the total is positive for the PAIR or negative for the PAIR. Remember, I am keeping track of the TWO currency news numbers in the pair. For example, a weak number in the USD and a Strong number in the EUR would mean a positive bias for EURUSD. As with all FA, it is not an exact science, only a guide.

Once the actual comes out, then the FA changes, based on whether the number was significantly different than projected numbers. I have noted, that the projected number is fairly accurate most of the time, giving a statistical edge when using the tally for bias BEFORE the news number is released. It is just another way of approaching the old adage " Buy the rumor, Sell the fact". Only in this case it could be either buy or sell the rumor and the opposite the fact depending on the actual numbers.

In the past I have noticed that this will pretty much define the bias for several hours before the news is released. I use this bias as a guide in my technical trading for the day, as I am a very short term trader. I like to be out of all positions, by the end of my trading day.



PS, I have used a combination of data from ADP and NFP to accurately trade NFP of over three years now using FA data contained in the calendar. I have posted this before a few years ago and explained it, but the concept was not received well, so I stopped posting about it.

So I would say, I use everything I can get my grubby hands on to increase my edge.

Note; I am absolutely NOT offering trading advice to anyone and am not suggesting in anyway people follow what I do.

I would say I use about 90% TA and 10% FA. I don't understand fully the FA and I have seen most big traders don't either as generally there is a lot of chop around news releases. Reading sites such as Bloomberg where traders are asked their opinions of where a pair is headed there is nearly always a 50/50 decision.

However I find the macro FA useful ie what has happened in Europe and the general state of the US economy.

The charts I find are the best as they tell the truth, and using higher time frames such as the the Day and 4hr I get a very good idea of what the sentiment of the market is, and trade accordingly.

For example most of my eurusd trades are long and any short trades are well protected by close stops.

I use everything I can get my grubby hands on, to increase my edge... I also get rid of the inefficiencies and all of the crap.

Kinda like a UFC fighter, they know about Kung Fu and all other martial arts, but you won't see them doing any crouching tiger hidden dragon moves inside the octagon It just doesn't work in the real world. And real trading... well, there are a lot of crouching tiger hidden dragon trading approach, which doesn't work in the real world of trading.

Fundies... I read them here and there. I believe their release times are very important. Good or bad news... I focus more on price rather than news. Any market movers can come to the market and become a contrarian (for whatever reasons). I don't care whether the news are good in the USA, if the big boys in China, Japan and Australia started selling for whatever reasons... what do you think will happen to the markets?

I mean, in this game, there is only one balance of power; Bulls or Bears. Price will always dictate who is in power... no matter what the news may bring.

wooAAATA!!! (my impersonation of Bruce Lee doing a really powerful, round -house kick.)

"I compare the previous news number with the project analyst's number and if it is a number that is good for the currency I give it a positive number from 1 to 2 based on whether the news event is high impact or medium impact. I assign a negative number if it is bad for the currency. I ignore low impact events. I just do this with all of the scheduled news events for the two currencies in the pair and then sum them up to decide if the total is positive for the PAIR or negative for the PAIR. Remember, I am keeping track of the TWO currency news numbers in the pair. For example, a weak number in the USD and a Strong number in the EUR would mean a positive bias for EURUSD."

Scott, great minds obviously think alike , as I wrote the NCI indicator to perform exactly this function. More info in the last couple of paragraphs of this post. Please feel welcome to use the indicator, if it's helpful to you.

The only reason I don't use it myself is that I lack the knowledge to assign meaningful values to news event outcomes.

David

hanover. i suspect you do not need to know the direction the news will push things, you just need to know a tidal wave is coming. the direction is not the point.

i suspect.

anyways.

I personally do think a combination of both is the surest way to navigate the treacherous waters of forex! only the big boys have the liberty to trade using FA only... for the big boys like us in the making, you have to be street smart which will always include knowing your way around both FA and TA....

The way I read smjones' post, he uses the positive or negative outcome of prior news to determine the likely direction an impending event will push price.

Anyway, I don't feel qualified to comment on news trading strategies. I was merely posting a link to an indy that I wrote, in case it was helpful.

That is correct I am using the projected verses the last reported to get a bias for the direction of prices hours before the news events. As the events happen, those bets are then off, because the rumor is over.

BTW the idea worked great today for EURUSD for me in picking a bias before the news events of this morning at 8:30 NY. Then the news came out and the cat was out of the bag so to speak. Also note that the news came out generally in the same direction as the projected event, with a few minor exceptions; sometimes more in line and sometimes a little less.

Note; I am absolutely NOT offering trading advice to anyone and am not suggesting in anyway people follow what I do.

I believe TA is fine (just avoid news events). Dont use any EA's the only way to make a return over time is watching the charts over many years.
There is no quick way to make a good return. The only quick thing you will do is blow your account.
Oh and if you trade on a demo account ensure the spread is close to your live account this can knock a good 20% off your profits.
So my advice 2% max risk, hard work (sorry) ignore any chart which goes up at 45 degree angle

95% TA, other 5% is when I try and analyze the fundamentals, have a biased opinion and it bites me in the butt.


Look at this nice rejection! You can guess where I took my profits!

You can never have too much information and TA is helpful for short term trading, swing trading and long term investing. TA provides a sufficient amount of opportunity for those who know how to read charts and react to them.

No. If you want to make money from this market, you need to know both technical and fundamental analysis properly.

No only technical knowledge is not sufficient. It is the combination of strategy, discipline, mind set, emotion control, money management and risk management. We need all of these. With an average strategy and all other qualities a person can make regular profit.