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The Bigger Picture Fundamentals and Resources

  • #21
  • Mar 16, 2011 12:26pm Mar 16, 2011 12:26pm
The last econ class I took (couple quarters ago) was called Money and Banking in Global Economics. The text book was a hodge-podge of acedemic articles put together by the professor. The general idea of the class was that traditional economic theories are being changed by how easily "hot money" can go from one asset class to another much more quickly than ever before.

When we discussed currency trading (my prof and I) it seems like one of the most crucial fundamental aspects to be aware of is the current correlation between risk/safe haven asseets. This can change so it's tricky.

I also like to keep the interest rate differential in mind too. For those who don't know the IRD is the difference between interest rates for currencies. So when you long a pair like aud/usd, you get paid the difference in interest rates between the Aud and the Usd.

The tragedy in Japan might help us understand the current risk asset correlation, so I'm keeping my eye on that at the moment.
  • #22
  • Mar 16, 2011 12:29pm Mar 16, 2011 12:29pm
Quoting bug
Well good luck with that, javapips. Based on your story in italics it looks like you have a lot of reading to do. A flow chart is not going to help you understand things in context and what they mean in the bigger scheme of things. Basic knowledge may be good enough for someone on the street but a trader that wants to trade off fundamental news needs expert knowledge. My advice is to skip the flow chart and start studying, because there really are not shortcuts.
that's ok Sir..,it's just an idea to make a tool for fundamental...and sure read is a must..

Have a Great day to you.



ps: so sorry if it's little hard to understand what i'm writing, English is not my mother language. so maybe take more effort to read my post.

cheers

java.
I will be the number one Manager.
  • #23
  • Mar 16, 2011 12:33pm Mar 16, 2011 12:33pm
Quoting javapips
English is not my mother language.
Your English is excellent man
  • #24
  • Mar 16, 2011 12:59pm Mar 16, 2011 12:59pm
Quoting bug
Well good luck with that, javapips. Based on your story in italics it looks like you have a lot of reading to do. A flow chart is not going to help you understand things in context and what they mean in the bigger scheme of things. Basic knowledge may be good enough for someone on the street but a trader that wants to trade off fundamental news needs expert knowledge. My advice is to skip the flow chart and start studying, because there really are not shortcuts.
oh yeah, if you comment about my knowledge in fundies, it's yes, honestly i know nothing about fundamental...,3 years trading i only see FF release news as Red or Green.. even if FF switch that color i will don't know... and that's why i'm here in this thread, i want to study from anyone that want to teach and sharing some knowledge..


@frankkn

thanks you frankkn, don't hesitate to remind me if i made wrong spelling.. nice to know you here..
I will be the number one Manager.
  • #25
  • Mar 16, 2011 2:06pm Mar 16, 2011 2:06pm
That one is a good thread to read too.

http://www.forexfactory.com/showthread.php?t=216097
.
  • #26
  • Mar 16, 2011 3:07pm Mar 16, 2011 3:07pm
Quoting javapips
oh yeah, if you comment about my knowledge in fundies, it's yes, honestly i know nothing about fundamental...,3 years trading i only see FF release news as Red or Green.. even if FF switch that color i will don't know... and that's why i'm here in this thread, i want to study from anyone that want to teach and sharing some knowledge..
Three years of trading and you don't know why a news release red? I don't know how you've manage to survive that long in the first place other than having avoided trading around news time.
This will sound a bit cocky but have you ever heard of a tool called Google? It lets you find all sorts of stuff. Here are a few links you might want to consider looking into.

UC Berkeley Webcast:
Econ 100A Economic Analysis--Micro (micro has nothing to do with GDP, but it provides a basis for understanding macro, that's why micro is usually taught before macro)
Econ 100B Economic Analysis--Macro

Wikipedia:
Economics
Basic Financial Concepts

A few videos:
Academic Earth
Khan Academy

This is what I could find in about 10 minutes. Imagine what you could do on your own with a couple of days, weeks, months. If you're really interested in this, whether you have a flow chart or not, one day you will have to start reading up on the material. I've provided you with a kick-start, the rest is up to you. Oh and by the way, be prepared to make a lot of mistakes along the way. Always make sure to learn from them.

Good luck!

PS.
There's lots of good stuff at your local library too.
If you don't risk, you don't ever have to lose.
  • #27
  • Mar 16, 2011 3:15pm Mar 16, 2011 3:15pm
Forgot to add - lots of goodies here as well:
Econtalk podcasts (guests include people from academia)
Concise Encyclopaedia of Economics
If you don't risk, you don't ever have to lose.
  • #28
  • Mar 16, 2011 4:11pm Mar 16, 2011 4:11pm
Quoting nasir.khan
That one is a good thread to read too.

http://www.forexfactory.com/showthread.php?t=216097
.
awesome thread. thanks for the recommendation!
  • #29
  • Aug 4, 2011 2:00pm Aug 4, 2011 2:00pm
This is my first post on the site and I was spurred to respond to your comments:

"GDP refers to the market value of all goods and services produced within a country in a given period. "

"If the US is showing negative GDP growth and the Eurozone is showing positive GDP growth, the Euro will strengthen and the US Dollar will weaken. Think of it like companies, which one would you rather invest in, a company that has positive growth or one that has negative growth?"

In fact, GDP does not actually measure what we produce, it measures what we spend. It is efficient to paraphrase from a letter sent to The Sunday Times 31 July 2011 by John Elliott:

"It isn't generally understood that GDP goes up if our government spends more. It also goes up if we borrow to spend. The past 15 years has seen GDP growth achieved totally by personal and government borrowing. Imagine measuring a business's health in the same way.

Our trade deficit is the best measure of our economy, exposing whether we produce more than we consume...."

I welcome this thread but I think that your definitions need to be solid in order to keep the thread alive.
  • #30
  • Aug 6, 2011 11:20pm Aug 6, 2011 11:20pm
What, just 2 pages?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #31
  • Aug 6, 2011 11:59pm Aug 6, 2011 11:59pm
Fundamentals don't move markets, capital flows do. Capital flows into better risk adjusted yields. Higher yields are normally offered by healthier economies but during times when risks outweigh yields capital flows back into lower yeilding but safer assets.

And that would be the case if the markets were efficient. Which they are not for many reasons. One of them is that markets are made by people and people can misinterpret things at times or lack the right information or simply be wrong or emotional or even crazy.

Then there are many other factors that move market on smaller timescale and have nothing to do with capital flows.
  • #32
  • Aug 7, 2011 12:06am Aug 7, 2011 12:06am
Quoting seagreen
And that would be the case if the markets were efficient. Which they are not for many reasons. One of them is that markets are made by people and people can misinterpret things at times or lack the right information or simply be wrong or emotional or even crazy.
I know, right? People are crazy.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #33
  • Aug 7, 2011 5:16am Aug 7, 2011 5:16am
Quoting seagreen
Fundamentals don't move markets, capital flows do. Capital flows into better risk adjusted yields. Higher yields are normally offered by healthier economies but during times when risks outweigh yields capital flows back into lower yeilding but safer assets.

And that would be the case if the markets were efficient. Which they are not for many reasons. One of them is that markets are made by people and people can misinterpret things at times or lack the right information or simply be wrong or emotional or even crazy.

Then there are many other...
Exactly.
  • #34
  • Aug 7, 2011 10:06am Aug 7, 2011 10:06am
Quoting seagreen
Fundamentals don't move markets, capital flows do. Capital flows into better risk adjusted yields. Higher yields are normally offered by healthier economies but during times when risks outweigh yields capital flows back into lower yeilding but safer assets.

And that would be the case if the markets were efficient. Which they are not for many reasons. One of them is that markets are made by people and people can misinterpret things at times or lack the right information or simply be wrong or emotional or even crazy.

Then there are many other...
However, would it be fair to say that fundamentals influence capital flow
  • #35
  • Aug 7, 2011 10:20am Aug 7, 2011 10:20am
Quoting newyear498
However, would it be fair to say that fundamentals influence capital flow
only if it influences those who move the most money the most times, else if they ignore it all then so should we.

it seems to me that fundamentals is just one of many excuses and ways to make up a story so that those who don't know shit can sound like they have some grasp on something greater than themselves. a bit like creating a magic man in the sky who controls the universe as an explanation for all things we don't yet have scientific real explanations for.
Congratulations ScalaFX for coming out of the closet!
  • #36
  • Aug 7, 2011 10:35am Aug 7, 2011 10:35am
Quoting nubcake
only if it influences those who move the most money the most times, else if they ignore it all then so should we.

it seems to me that fundamentals is just one of many excuses and ways to make up a story so that those who don't know shit can sound like they have some grasp on something greater than themselves. a bit like creating a magic man in the sky who controls the universe as an explanation for all things we don't yet have scientific real explanations for.
seems to be a similar effect to technical's as well
  • #37
  • Aug 7, 2011 11:23am Aug 7, 2011 11:23am
Quote
a bit like creating a magic man in the sky who controls the universe as an explanation for all things we don't yet have scientific real explanations for.
Speculation is a game of incomplete information. You have to accept that you don't have all the information. Get as much as you can and work with what you have. How much profit you are able to pull with the information you have is the skill aspect of speculation.
Cautiously optimistic. . .
  • #38
  • Aug 7, 2011 11:50am Aug 7, 2011 11:50am
Quoting Tact1cal
Speculation is a game of incomplete information. You have to accept that you don't have all the information. Get as much as you can and work with what you have. How much profit you are able to pull with the information you have is the skill aspect of speculation.
no my wang is bigger!

making a profit based on available information is exclusive to the need for making up stories and magic for why things occur or do not occur.

i'm waiting on the day for some retard to proclaim their feng shui is their edge.
Congratulations ScalaFX for coming out of the closet!
  • #39
  • Aug 7, 2011 12:29pm Aug 7, 2011 12:29pm
Quoting newyear498
However, would it be fair to say that fundamentals influence capital flow
..through people making decisions about capital flow.
  • #40
  • Aug 7, 2011 12:35pm Aug 7, 2011 12:35pm
Quote
no my wang is bigger!

making a profit based on available information is exclusive to the need for making up stories and magic for why things occur or do not occur.

i'm waiting on the day for some retard to proclaim their feng shui is their edge.
I don't really want to know how big anyone's wang is lol.

I'm am curious though, what's so magical about taking information available and attempting to profit from it. When I enter a trade, after I enter the trade I look to news to confirm my analysis. You can use information after the fact to determine how right or wrong you are.

If I am looking for a surge in risk appetite and I enter a trade. I'm going to be looking for some headlines on Reuters saying the MSCI spiked on investor demand due whatever market condition sparked their interest. If I don't get that news I know there may have been something wrong in my analysis and I can call it a bad trade. If I get something completely different then I know my analysis was just flat out wrong and I got lucky if I won or I know why I lost. If the MSCI spikes as result of investor demand then I was right. After the fact information has uses. The market isn't completely illogical and people enter trades for reasons.

To put it simply, ANY trade I enter I have an idea of the headlines I plan to be reading within the next couple minutes, hour, day whatever my time frame is.

There's more than enough information out there to find out when you got lucky, when you were spot on, and when you fucked up.

What's so magical about that?
Cautiously optimistic. . .
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